Moreover, when the court announces bankruptcy, if it considers that an agreement can be reached, that present are reasonable expectations of success of the proposed rescue and the collective satisfaction of creditors is not violated, decides to proceed with the recovery process for a period not greater than 4 months after issuance of the decision. The chairman of the court may extend this period for another one month at the request of the debtor, creditor or the agents.
How to ensure the protection of creditors
The need to save the company does not oppose, but rather is entirely consistent with the interests of creditors, since creditors will generally be more content from an operating company rather than a forced sale of its property.
In the few cases where the sale of assets is more favorable to creditors than the rescue of the company, comes when companies are non-viable in the medium term and rescue attempts are not socially and economically justified because the company is condemned to failure.
Therefore, as a criterion to initiate reorganization procedure is determined not to violate the collective satisfaction of creditors. Thus, the new regulations are harmonized with the objectives of the Bankruptcy Code. Especially in cases where rescue agreement is possible, but the success of the company is more likely through the sale of all or parts of it, returns the special law for liquidation.
It should be noted that in order to avoid unfair results the bill provides essential criteria for the ratification of the contract. For instance, it provides that on the basis of the contract, creditors should not find themselves in a worse position than that in which they would have ended up if the debtor goes bankrupt.
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