Why would a company seeks bankruptcy protection?
In general, the companies that make the application for bankruptcy are facing arrears and are relentlessly charged by lenders. In addition to not being able to afford your debts, the company’s balance sheet is unsustainable, causing her to see this process as a way out of the situation.
What types of companies may ask?
Private companies of any size and with more than two years of activity may apply to the court recovery. However, the law does not apply to state-owned companies and mixed capital, as well as to credit and health care cooperatives.
Companies who requested bankruptcy for less than five years and are led by entrepreneurs who have been convicted of criminal bankruptcy also can not resort to the procedure.
How long can last a bankruptcy?
A company can stay in bankruptcy protection for up to 24 months, however, the time may vary according to each application.
What should have in the application for bankruptcy?
The request shall be presented: financial statements for the last three months; balance sheet; Demonstration of accumulated results; management reporting and cash flow projections; income statement for the last fiscal year; Full list of creditors; information of employees; and respect the private property of the controlling shareholders and the debtor’s administrators.
From the approval of the application, the company must submit the recovery plan within 60 days.
How does bankruptcy?
According to the law, after opening the request for recovery, the creditors define the payment of debts, terms, discounts, among other details. With this, the company gains a breather more to continue their activities.
What are the advantages of bankruptcy?
The bankruptcy is considered advantageous because it allows the company indebted to recover and continue with their activities. Moreover, their debts are frozen for up to 180 days.
According to JURIMETRICS Association (ABJ), 42.2% of the bankruptcy process with plans approved in 2016 in Sao Paulo have been successfully completed, that is, without resulting in bankruptcy.
The bankruptcy process is difficult, however, it is possible to get out of the hole and have a healthy business and generating profits again.
Count on MG lawyers to identify the most appropriate procedure the reality of your company. In any case, we are specialized in bankruptcy protection, and act for the process to be successful, and the company is balanced and strengthened again.