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Marta Duarte, CCA's Partner, in an interview with Jornal Económico, talks about the resource to insolvency procedures to recover companies that, despite their viability, are having cash flow difficulties due to the pandemic crisis of COVID-19.
The CCA Partner says "the three main mechanisms for corporate restructuring - the Special Revitalization Process (PER), the Extrajudicial Business Recovery Scheme (RERE) and the insolvency proceedings - were insufficient to meet the needs of the market during the confinement", and she adds that "Portugal should follow the example of Spain, where the deadlines for companies to file for insolvency and the possibility for creditors to apply for the insolvency of a company have been suspended".
"It is important to distinguish two types of companies: those that experienced cash flow problems before the pandemic (which worsened), and those companies that, despite having their payments on time, did not have a big 'cushion' and faced constraints", stresses Marta Duarte, who considers that "it is mainly for these last companies that there must be a special regime that allows them to recover because that is what is intended. I do not know how it will be designed, but there will have to be a mechanism to assess whether the companies applying for it entered into crisis because of COVID-19 or were already in crisis before it, because in their case what makes sense is to resort to the mechanisms that already existed".
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- Jornal Económico