Best Restructuring & Insolvency Lawyers in Larnaca

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EasyCorporate

EasyCorporate

30 minutes Free Consultation
Larnaca, Cyprus

Founded in 2024
3 people in their team
English
Greek
Streamlining Company Registration in Cyprus with Precision and TransparencyAt EasyCorporate, we revolutionize the company registration process in Cyprus, offering entrepreneurs a seamless and transparent experience through our cutting-edge online platform. We are committed to simplifying business...
Kalogirou Real Estate
Larnaca, Cyprus

English
Kalogirou Real Estate, established in 2020, is a family-owned firm based in Larnaca, Cyprus, specializing in comprehensive real estate services. The company offers a wide array of services, including real estate agency operations, individual property management, real estate valuations, legal...
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About Restructuring & Insolvency Law in Larnaca, Cyprus

Restructuring and insolvency law in Larnaca, Cyprus is a specialized field focusing on the financial reorganization of struggling businesses and individuals. It covers procedures for dealing with debts when a person or company cannot pay what they owe, as well as mechanisms for restructuring a business's obligations to avoid insolvency. The legal landscape aligns with Cyprus's company and bankruptcy legislation, while also considering European Union directives. These laws provide a framework for voluntary arrangements, judicial management, bankruptcy, and liquidation, aiming to balance the interests of debtors, creditors, and other stakeholders.

Why You May Need a Lawyer

There are several situations in which you may require legal assistance for restructuring or insolvency matters in Larnaca:

  • You or your business are unable to pay debts as they fall due and need guidance on possible solutions.
  • Creditors are taking legal action against you or your company concerning unpaid debts.
  • You want to explore alternatives to formal bankruptcy, such as company voluntary arrangements or debt restructuring.
  • You are a creditor seeking to recover outstanding money and need advice on how insolvency affects your rights.
  • You need to understand your obligations as a director of a company facing financial difficulties.
  • You are interested in purchasing distressed assets or businesses under administration or liquidation.
  • Personal bankruptcy or liquidation proceedings have been issued against you or your company, and you need to understand the implications and possible defenses.

Local Laws Overview

Restructuring and insolvency in Cyprus are governed chiefly by the Companies Law, Cap. 113, and the Bankruptcy Law, Cap. 5. These laws apply in Larnaca and across Cyprus with certain procedures conducted before the District Court of Larnaca or the relevant Registrar of Companies. The main legal processes include:

  • Restructuring - Formal and informal mechanisms for companies to reorganize debts and avoid insolvency.
  • Examinership - A court procedure that provides protection from creditors while a business is being restructured.
  • Receivership and Administration - Involving the appointment of a receiver or administrator to realize assets and distribute proceeds to creditors.
  • Liquidation - The legal process of winding up a company’s affairs, selling assets, and distributing the proceeds among creditors.
  • Bankruptcy - Applicable to individuals, resulting in the distribution of assets among creditors and, eventually, a discharge of debts.
  • Creditors’ rights - Regulated regarding priority, security, and distributions in insolvency situations.

It is also important to note that Cyprus, as an EU member, incorporates relevant EU regulations and directives on cross-border insolvency and creditor protection, which may be vital if assets or creditors are located outside Cyprus.

Frequently Asked Questions

What is the difference between restructuring and insolvency?

Restructuring aims to reorganize a company or individual's finances to avoid insolvency, usually by renegotiating terms with creditors, while insolvency occurs when a person or business cannot pay their debts as they become due, often resulting in formal liquidation or bankruptcy proceedings.

How do I know if I or my company is insolvent?

Insolvency is generally determined by two tests: the inability to pay debts as they fall due and having liabilities that exceed assets. Legal or financial advice can help confirm your situation.

What is the process of company liquidation in Larnaca, Cyprus?

Company liquidation can be voluntary (initiated by the shareholders or creditors) or compulsory (ordered by the court). The appointed liquidator collects and sells the company's assets to pay creditors according to the legally established order of priority.

Can I stop creditors from taking legal action against me during insolvency?

Certain legal procedures, such as applying for examinership or negotiating settlements, can temporarily halt creditor actions. It is essential to seek legal advice to understand available protections and their applicability.

What role does the court play in insolvency proceedings?

The District Court of Larnaca has the authority to hear insolvency applications, issue winding-up orders, and appoint liquidators, receivers, or administrators.

Is personal bankruptcy the same as liquidation?

No, personal bankruptcy applies to individuals, allowing debt relief through the distribution of assets, while liquidation is used for companies and aims to wind up the company’s affairs and distribute assets.

How long does the bankruptcy process take in Cyprus?

The duration can vary significantly depending on the complexity of the assets and debts involved, but bankruptcy typically lasts for a period of three years unless otherwise extended or discharged by court order.

Can foreign creditors participate in insolvency proceedings in Larnaca?

Yes, foreign creditors are treated equally under Cyprus law and can file claims in insolvency proceedings, subject to applicable requirements and time limits.

What are directors’ duties when a company is facing insolvency?

Directors must act in the best interests of creditors, preserve company assets, avoid fraudulent or wrongful trading, and not give preferential treatment to any creditor.

Can a company recover after entering insolvency proceedings?

Depending on the type of proceedings and the success of restructuring efforts, some companies can recover and exit insolvency. This typically happens through examinership, restructuring, or creditor arrangement agreements.

Additional Resources

The following local and national bodies offer assistance, information, or oversight in matters of restructuring and insolvency in Larnaca, Cyprus:

  • Department of Registrar of Companies and Official Receiver - Handles company liquidations, bankruptcy filings, and maintains public records.
  • District Court of Larnaca - Responsible for issuing insolvency and bankruptcy orders.
  • Cyprus Bar Association - Offers directories of qualified insolvency and restructuring lawyers.
  • Association of Cyprus Banks - Can provide information on debt mediation and financial restructuring options.
  • Insolvency Practitioners in Cyprus - Licensed professionals who can be appointed as liquidators or insolvency administrators.
  • European Consumer Centre Cyprus - Supports individuals with cross-border insolvency issues within the EU.

Next Steps

If you or your business are facing financial distress in Larnaca, Cyprus, taking timely and informed action is critical. Here is how to proceed:

  • Gather all relevant financial documents, including records of debts, assets, contracts, and correspondence with creditors.
  • Assess your situation and identify whether you need advice regarding individual or company debts.
  • Contact a qualified restructuring and insolvency lawyer or insolvency practitioner experienced in Cyprus procedures.
  • Discuss your options for restructuring, settlement, bankruptcy, or liquidation and request a tailored advice plan.
  • If legal proceedings are initiated, ensure you respond promptly and follow the court’s directions to protect your rights and interests.
  • Consider all avenues for negotiating with creditors and explore out-of-court arrangements where possible to minimize loss and legal costs.

Legal challenges related to restructuring and insolvency require professional guidance to ensure compliance with local laws and to achieve the best possible outcome for all parties involved.

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Disclaimer:
The information provided on this page is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and relevance of the content, legal information may change over time, and interpretations of the law can vary. You should always consult with a qualified legal professional for advice specific to your situation. We disclaim all liability for actions taken or not taken based on the content of this page. If you believe any information is incorrect or outdated, please contact us, and we will review and update it where appropriate.