Insolvency and Bankruptcy

Reorganization proceedings (concurso preventivo)

Your company, or you as an individual, is facing suspension of payments and needs to restructure debts without falling into bankruptcy. Reorganization proceedings allow negotiation with creditors under court protection and avoid individual enforcement actions.

In one line

Reorganization proceedings are not the same as bankruptcy: they seek to preserve the business and reach an agreement, not to liquidate the estate. They also differ from the APE, an out-of-court agreement that is later approved by a court.

First steps

Updated financial statements and balance sheets
Full list of creditors with amounts and grounds
Detail of assets and liabilities
Documentation evidencing the suspension of payments
Commercial books and accounting support
Definition of the creditor classes

What reorganization proceedings are

Reorganization proceedings (concurso preventivo) are the procedure set out in Insolvency and Bankruptcy Law 24,522 for a debtor in suspension of payments to negotiate with its creditors and avoid bankruptcy. They are opened at the debtor's own request, who retains management of its assets under the supervision of a court-appointed trustee (síndico).

From the opening, individual enforcement actions are stayed and proceedings are concentrated before a single judge. The debtor gains time and an orderly framework to present a payment proposal that, if accepted by the legal majorities and approved by the court, becomes binding on all creditors.

Requirements and filing

Both individuals and private legal entities may file for reorganization. The filing requires proving the state of suspension of payments and attaching the accounting records, the list of creditors and the detail of assets and liabilities required by law.

A well-prepared filing shapes the rest of the process: incomplete or inconsistent data can lead to rejection of the petition. That is why we work through the economic and legal information before filing the reorganization petition.

Verification of claims and the exclusivity period

Creditors must request verification of their claims before the trustee, who prepares the reports that determine who will vote and for what amounts. This is a key stage, since it determines the majorities needed to approve the agreement.

During the exclusivity period the debtor formulates and negotiates its payment proposal. To have the agreement approved, it must obtain the majorities of creditors and capital required by Law 24,522 within each class. If it fails, the salvataje (cram-down) procedure may be triggered, or bankruptcy may be declared.

Common mistakes

Delaying the filing until enforcement actions have become unmanageable
Filing incomplete or inconsistent accounting information
Omitting creditors from the initial list
Failing to plan the payment proposal before the exclusivity period
Neglecting the claim-verification stage

Frequently asked questions

Does reorganization stay enforcement actions and attachments?

Yes. Upon opening, individual enforcement actions based on a prior cause or title are stayed, and claims are channeled through verification of claims before the trustee.

Do I lose control of my company during the proceedings?

Not necessarily. As a rule the debtor retains management of its assets under the trustee's supervision, with limitations on certain acts requiring court authorization.

How long does a reorganization proceeding last?

It depends on the complexity of the liabilities and the negotiation. The law sets stages with deadlines, such as the exclusivity period, but the actual duration varies case by case. We cannot guarantee an outcome or a specific timeframe.

What happens if I cannot reach an agreement with creditors?

If the majorities are not reached, depending on the case, the salvataje procedure set out in the law may be triggered, or bankruptcy may be declared. That is why the strategy behind the proposal is defined from the outset.

This page is informational and does not replace professional advice on your specific case. It does not imply any promise of results.

Let's assess your situation

If your company is facing financial difficulties, let's evaluate together whether reorganization proceedings are the right tool. Write to us for a consultation.

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