CAN I AVOID BANKRUPTCY BY REFINANCING THE DEBT? ARRIAGA ASSOCIATES, BANKRUPTCY DIVISION ITSELF HAS ACHIEVED WITH OTHER CLIENTS. ARRIAGA ASSOCIATES ATTORNEYS BANKRUPTCY EXPERTS AND SMES. NOW ALSO IN ZARAGOZA, SPAIN Reviewed by Momizat on .   CAN I AVOID BANKRUPTCY BY REFINANCING THE DEBT? For a company it is very difficult to manage the situation of having serious liquidity problems. And even nowa   CAN I AVOID BANKRUPTCY BY REFINANCING THE DEBT? For a company it is very difficult to manage the situation of having serious liquidity problems. And even nowa Rating: 0
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CAN I AVOID BANKRUPTCY BY REFINANCING THE DEBT? ARRIAGA ASSOCIATES, BANKRUPTCY DIVISION ITSELF HAS ACHIEVED WITH OTHER CLIENTS. ARRIAGA ASSOCIATES ATTORNEYS BANKRUPTCY EXPERTS AND SMES. NOW ALSO IN ZARAGOZA, SPAIN

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CAN I AVOID BANKRUPTCY BY REFINANCING THE DEBT?

For a company it is very difficult to manage the situation of having serious liquidity problems. And even nowadays the problem is exacerbated because financial institutions are unwilling to provide financing, especially if the company has some sort of problem.

However, in our experience, we have seen that in these moments I could play hard and be forced to refinance. As Arriaga Associates and a consulting firm, is a law firm, has been living situations with their clients, which has been intertwined with the financial work legal work.

For example, helping to manage the liquidity of an SME and, seeing the difficulties of obtaining additional financing or obtain a debt refinancing, the company and our company was raised to force the issue with the possibility of raising a bankruptcy. Associated Arriaga produced various reports such as business plans, feasibility plans, budgets, cash, etc.. and it was not enough even helped. In the process of negotiating with more than a dozen banks that worked with the company began to consider the possibility of bankruptcy. However, the situation did not change greatly. At the end of sending a letter to the commercial court asking the three-month extension to gain the support of a proposed agreement in advance and then banks became more nervous and we both bank refinancing as increased funding.

With the new bankruptcy law reform that will be more frequent. Since you may also request the deferment of the obligation to call the meeting of creditors also when trying to reach an agreement to refinance, and not when one is trying to gain support for an early agreement. It also granted incentives for refinancing and new funding for financial institutions to ensure that 50% of fresh money is guaranteed to put it as a credit against the estate in the case of an eventual bankruptcy. Furthermore, it only required 75% of bank debt to compel all banks refinanaciación agreement.

The reform also aims to shorten the time of bankruptcy and expand the possibilities that just do lack a trustee in bankruptcy when the contest is simple presumed opinion of the judge. There may be so abbreviated state contests. In addition, judges discharged their responsibilities more insolvency administrations.

In conclusion we can say that from the perspective of a bankruptcy can be leveraged as an opportunity for bank refinancing. And if not successful, to achieve a good agreement with creditors to save the company and its liquidity problems. In fact while the bankruptcy handled the debt workouts are immobilized, and stop the executions and liens, including rehabilitation may lease or supplies essential to the business.

If you want to take advantage of these opportunities count Arriaga Associates who, in addition to lawyers, has consultants specializing in refinancing in bankruptcy situations.

Jesús María Ruiz de Arriaga

Lawyer, economist and consultant. Managing Partner

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