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Restructuring and insolvency law in Lima, Peru, is designed to help companies and individuals manage financial distress while protecting the interests of both debtors and creditors. The legal framework establishes processes for the reorganization of businesses with potential for recovery and the orderly liquidation of entities unable to meet their obligations. These processes aim to preserve businesses when viable, safeguard jobs, and maximize asset value for all parties involved.
In Lima, the capital and the primary business hub of Peru, restructuring and insolvency procedures are particularly relevant for companies operating in diverse sectors. Handling such matters properly requires a clear understanding of local laws, court procedures, and the interaction between debtors, creditors, and regulatory authorities.
Legal assistance is highly recommended for anyone facing restructuring or insolvency proceedings in Lima. Here are a few common scenarios where a lawyer's expertise is valuable:
A lawyer with expertise in restructuring and insolvency can guide you through complex legal options, represent you in negotiations or court, and help minimize risks during challenging times.
In Peru, including Lima, restructuring and insolvency are primarily governed by the “Ley General del Sistema Concursal” (General Bankruptcy System Law), overseen by the National Institute for the Defense of Competition and the Protection of Intellectual Property (INDECOPI). The law provides two main processes: Preventive Restructuring (Reestructuración Preventiva) and Ordinary Reorganization (Procedimiento Concursal Ordinario).
Key aspects of local law include:
The law also provides for cross-border insolvency recognition in line with international standards, although these cases may require specialized legal strategies.
Restructuring involves reorganizing a financially distressed company to allow it to continue operating, pay off debts, and avoid liquidation. Insolvency typically refers to a situation where a debtor cannot pay its debts, potentially leading to liquidation or asset sell-off. Both processes fall under Peru’s bankruptcy law framework.
A business can apply for restructuring if it is facing cash flow difficulties but believes it is still viable. The decision is based on financial statements, payment history, and expectations for future recovery, typically evaluated by INDECOPI and the creditors involved.
INDECOPI is the governmental authority that manages bankruptcy and restructuring processes in Peru. It accepts and processes applications, oversees creditor meetings, ensures the legality of procedures, and resolves disputes between stakeholders.
Yes, creditors can file a petition if a company or individual fails to pay a debt that is due, liquid, and enforceable. INDECOPI will then start the process and notify all interested parties.
Labor claims are given high priority during insolvency proceedings. Employees are usually protected, and the goal of restructuring is often to preserve jobs. However, the company must strictly follow labor and social security laws.
Yes, in many cases, companies are allowed to operate under supervision. The court or INDECOPI may appoint an administrator to oversee management during this period, especially if there are concerns about asset protection or ongoing business risks.
Timelines can vary significantly. A simple liquidation may take several months, while complex restructuring can last over a year, depending on the number of creditors, disputes, and negotiation processes. Having a lawyer helps expedite procedures through proper compliance and representation.
Most bankruptcy and restructuring proceedings are administrative and managed by INDECOPI rather than the judicial courts. Participation in creditors’ meetings may sometimes be done virtually, especially under current regulations.
Generally, shareholders have limited liability; however, directors or legal representatives may be held personally liable in cases of fraud, willful misconduct, or violation of legal duties, especially if criminal conduct is found.
Yes, foreign creditors have the same rights as local creditors and can file claims, participate in creditor meetings, and vote on decisions, provided they follow the legal procedures and meet documentation requirements.
Several resources and institutions can provide information and support regarding restructuring and insolvency in Lima, Peru:
If you or your business are facing financial distress or believe you may need to initiate or defend against restructuring or insolvency proceedings in Lima, it is recommended to:
Prompt action and professional advice can make a significant difference in outcomes, whether the goal is business recovery or an orderly exit through liquidation.
