Possible Outcomes - Information

Inside the concurso de acreedores there are three different ways to reach a solution

The ‘Pre-packaged Plan’ (Convenio anticipado)
This is the preferred restructuring solution. It consists of an agreement reached initially by the debtor and creditors owed at least 20 per cent of the company’s liability. This agreement must include the continuation of the business and can be proposed to the rest of the creditors from the start of proceedings (together with the insolvency petition) or in the weeks thereafter. There are no legal constraints to the proposal of such a plan and it is applicable to all sorts of restructuring operations: debt cancellation, exchanges of debt for equity, and mergers. It is also the cheapest possible route for a restructuring, since it reduces drastically the duration of the insolvency procedure. The plan must be approved by creditors representing the majority of the debt. Since it is considered to be a benefit for the debtor, a ‘pre-packaged plan’ can ony be proposed – and later approved – if the company (and its directors) have behaved ‘properly’ in the market during the previous years.

The ‘Insolvency Plan’ (Convenio ordinario)
If no pre-packaged plan is submitted, there is still one last chance for an agreed solution to the insolvency: the ordinary ‘Plan’. This solution, very similar to Germany’s Insolvenzplan, is less attractive. It has legal restrictions: for instance, there cannot be a debt cancellation beyond 50 per cent or a payment adjournment longer than five years. Although the opportunities for reorganising or rescuing the business as a going concern are the same as for a Pre-packaged Plan, the Insolvency Plan takes longer to put into effect and is more costly. This Plan also implies the continuation of the business and can give effect to numerous restructuring operations involving third parties. The Plan can be voted by ordinary creditors. Sub-ordinated creditors do not have the right to vote (even though they are affected by the Plan). Privileged creditors can stay out of the Plan (and, therefore, they would not be affected by it), but they can also vote in favour and bind themselves. This later option only happens when the privileged creditor takes an active role in the rescuing of the business (and is not just a creditor that sits up and waits for re-designed activity of the company to generate enough cash to repay its debt as the Plan says).

Winding up (Liquidación)
It is legally considered the ‘last solution’. However, the IA 2004 has made a considerable effort to design a winding up system that captures the real value of the company. Unlike Spain’s former Insolvency Law, winding up in this new law moves the process away from a liquidation on a break up basis (traditionally a way to destroy value), and requires the sale of the business (or part of it) as a going concern. It is about ‘liquidating the debtor (company), not the business’. In a liquidation, the liquidator is given a free rein to obtain the best price reasonably possible for the business. The liquidator must draft a ‘Liquidation Plan’, that need not be approved by the debtor or the creditors. It is purely a technical decision taken by three ‘experts’. Third parties must be included in the picture. Usually, liquidators create subsidiaries and transfer the viable parts of the businesses to those subsidiaries. They will then sell the subsidiaries (by means of an auction or by direct sale). If a liquidation takes place within the concurso de acreedores, Directors who have breached their duties to the company may face disqualification and have personal liability for the company’s debts.

Hi There, I am new to the site.

Can someone tell me what happens if you decide to vote no , ie sign nothing. If the yes vote wins the poll how are the people who voted no effected or are we all in the same boat deciding which of the two yes options we then want at that stage?

Any advice would be much appreciated.

Regards

Maurice

If the yes vote wins you have a simple choice of having your house or 65% of your money back.

San Jose are assuming that all those who vote yes want their house.

if you vote yes & want your money back, that will mess up all their finances as not enough people will continue with the build so they will probably go into liquidation some years down the line.

Voting yes & wanting your money back is sending a false message

Regards

Not quite,

You see if you vote 'yes' and the proposal goes ahead you are locked into the 65% in five years time. 

Whereas if you vote 'no' (i.e. against) and the proposal goes ahead then you can resolve your contract and claim your money back with immediate effect. (Oh I doubt you would get it back immediately, but at least you could claim it).

And this brings me to an important point.  If I was devious, I would not have told you this second part but encouraged you all to sign up, so I would have more chance of getting my money, being one of only a few.

;)

redman and Wakemans , many thanks for your reply, It makes it easier for me to make my decision.

Excellent posting Redman  -  many thanks.

Because Almedena wants all the money for herself, she will be taken out of the equation long before 6th May you mark my word

Am i to understand by your statement you have taken out a contract on her to be carried out by the Bridlington mafia ?

Anonymous.

No Not the Bridlington Mafia, but someone we know is taking her to court for Fraud, therefore stopping her from having any input into the affairs of Hdt.

Dave

In reality we know that will not work because she will just sit in the background pulling the strings of a front line puppet.

Does anybody know someone or some organisation who might be suitable for this job possibly with previouse experience of puppetry ?

Ken.

_______________________

 

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es