Post by account_disabled on Mar 12, 2024 1:37:13 GMT -5
Sparse devices. The caput of article of the LREF in its original wording in principle prohibited the alienation or encumbrance by the debtor in recovery of “goods or rights in his permanent assets except for an evident use recognized by the judge after hearing the Committee with except those previously listed in the judicial recovery plan”. In this way the debtor depended on judicial authorization or approval of a provision in the PRJ to offer any type of guarantee to the financier that involved assets from his “permanent assets” which would be changed by Law No. which replaced the expression “non-current asset”.
In turn the caput of article of the LREF provided and continues to provide unchanged by the reform that credits contracted during judicial recovery “ including those relating to expenses Phone Number Data with … loan contracts” will be considered out-of-court proceedings in the event of bankruptcy. In this context the financier was equated to any other party that continued to do business with the debtor in recovery without a priority position among extra-bankruptcy creditors.
In fact with regard to the order of classification of payments from extra-bankruptcy creditors in the context of bankruptcy in accordance with the original wording of article of the LREF the credit relating to the financing provided to the debtor in recovery hypothesis framed in the original item V of the article would be in a less favorable situation than other extra-bankruptcy creditors. Therefore even though it is considered extra-bankruptcy credit the credit arising from DIP Financing would be the last to be paid in relation to the other extra-bankruptcy creditors described in article of the LREF.
In this scenario it was pointed out that there were disincentives of various types to the granting of DIP Financing. On the one hand there would be a certain disincentive to potential grantors of DIP Financing due to their less privileged position in the context of extra-bankruptcy credits in the event of bankruptcy as highlighted above.
On the other hand there would be a certain legal uncertainty regarding the very validity and the contours of legal discipline of DIP Financing given the absence of specific legal provision on the topic. For example the legislation did not expressly indicate the unneed for approval of DIP Financing by the debtor's creditors in recovery nor the unneed for judicial authorization.
Possibly due to the lack of greater legal certainty it was not uncommon before the legislation was reformed for there to be special provisions regulating the fate of credits arising from financing contracted during the course of judicial recovery in the event of the debtor's subsequent bankruptcy. As an example the judicial recovery of OGX stands out. In this case the PRJ provided for different treatment that would be given to credit related to DIP Financing in the event of bankruptcy. According to the Plan “privileged treatment and absolute precedence of receipt would be given including in the event of subsequent bankruptcy of OGX andor Guarantors as provided for in Articles and of the Bankruptcy Law ” .
In turn the caput of article of the LREF provided and continues to provide unchanged by the reform that credits contracted during judicial recovery “ including those relating to expenses Phone Number Data with … loan contracts” will be considered out-of-court proceedings in the event of bankruptcy. In this context the financier was equated to any other party that continued to do business with the debtor in recovery without a priority position among extra-bankruptcy creditors.
In fact with regard to the order of classification of payments from extra-bankruptcy creditors in the context of bankruptcy in accordance with the original wording of article of the LREF the credit relating to the financing provided to the debtor in recovery hypothesis framed in the original item V of the article would be in a less favorable situation than other extra-bankruptcy creditors. Therefore even though it is considered extra-bankruptcy credit the credit arising from DIP Financing would be the last to be paid in relation to the other extra-bankruptcy creditors described in article of the LREF.
In this scenario it was pointed out that there were disincentives of various types to the granting of DIP Financing. On the one hand there would be a certain disincentive to potential grantors of DIP Financing due to their less privileged position in the context of extra-bankruptcy credits in the event of bankruptcy as highlighted above.
On the other hand there would be a certain legal uncertainty regarding the very validity and the contours of legal discipline of DIP Financing given the absence of specific legal provision on the topic. For example the legislation did not expressly indicate the unneed for approval of DIP Financing by the debtor's creditors in recovery nor the unneed for judicial authorization.
Possibly due to the lack of greater legal certainty it was not uncommon before the legislation was reformed for there to be special provisions regulating the fate of credits arising from financing contracted during the course of judicial recovery in the event of the debtor's subsequent bankruptcy. As an example the judicial recovery of OGX stands out. In this case the PRJ provided for different treatment that would be given to credit related to DIP Financing in the event of bankruptcy. According to the Plan “privileged treatment and absolute precedence of receipt would be given including in the event of subsequent bankruptcy of OGX andor Guarantors as provided for in Articles and of the Bankruptcy Law ” .