Extrajudicial restructuring procedures
of companies obligations
Restructurings achieved outside the judicial proceedings of insolvency are more flexible and can be more effective than judicial ones. Therefore, before a case of insolvency is brought before the court, a possible option for debtors and creditors is to reach an informal solution or a financial restructuring by extrajudicial negotiations.
Extrajudicial restructuring of companies obligations lead to:
- continuation of the company's activity;
- avoiding economic and social impacts that major bankruptcy cases of companies have;
- successfully passing the periods in which the company is facing financial distress.
Extrajudicial restructuring of companies obligations contribute to:
- reducing loss of creditors;
- achieving positive effects on other interested parties (customers, employees, suppliers and investors) due to the fact that a company which is in extrajudicial restructuring process continues to operate;
- developing confidence in correctness, transparency and level of accountability among the business community.
Extrajudicial restructuring of companies obligations can be more efficient and effective than judicial proceedings (shorter settlement periods and higher recovery rates).
