Best Restructuring & Insolvency Lawyers in Lisbon

About Restructuring & Insolvency Law in Lisbon, Portugal

Restructuring and insolvency law in Lisbon, Portugal, is a vital area of legal practice, providing solutions for individuals and companies facing financial distress. This field covers legal processes that help financially troubled businesses and individuals either restructure their debts to regain viability or liquidate assets if recovery is not feasible. The legal framework ensures balance between the rights of creditors, debtors, and other stakeholders while aiming to preserve business value and employment where possible. Portuguese law specifies detailed procedures, prioritizing fair treatment and encouraging early intervention to maximize successful outcomes.

Why You May Need a Lawyer

There are several common situations where individuals or businesses in Lisbon require legal assistance with restructuring and insolvency matters:

• When a company or individual is unable to pay debts on time and seeks protection from creditors while negotiating a solution
• If creditors are taking legal action, such as freezing assets or applying for insolvency proceedings
• To draft or review agreements for restructuring financial obligations
• When directors, shareholders, or employees need guidance on their rights and responsibilities during insolvency
• For guidance on voluntary liquidation, asset distribution, or winding up a business
• If facing cross-border insolvency issues involving assets or creditors in different countries
• To ensure compliance with local laws and avoid personal liability

A lawyer with restructuring and insolvency experience can help identify the most suitable legal strategy, represent your interests in court or negotiation, and maximize the chances of a favorable outcome.

Local Laws Overview

Portugal’s insolvency and restructuring laws are mainly governed by the Código da Insolvência e da Recuperação de Empresas (CIRE), the Insolvency and Company Recovery Code. Some of the key aspects include:

• Insolvency Proceedings: Initiated when a debtor is unable to fulfil payment obligations as they fall due. The process can be voluntary or requested by creditors.
• Special Revitalization Process (PER): A procedure that allows debtors in financial difficulty, but not yet insolvent, to negotiate restructuring with creditors while suspended from enforcement actions.
• Payments Plan Process: Designed for individual debtors, it provides a framework for restructuring personal debts to avoid insolvency declarations.
• Liquidation: If restructuring is not possible, assets may be liquidated under judicial supervision to pay creditors according to prescribed priorities.
• Director Liability: Directors may face personal liability if they fail certain legal duties, including the timely filing for insolvency.
• Cross-border Provisions: Adherence to EU insolvency regulations ensures the recognition and coordination of proceedings involving multiple EU countries.

Frequently Asked Questions

What is the difference between restructuring and insolvency in Portugal?

Restructuring refers to procedures aimed at reorganizing a debtor’s finances so they can continue to operate and gradually repay creditors. Insolvency occurs when a debtor is unable to meet obligations, often resulting in the liquidation of assets and cessation of business activity, unless a recovery plan is approved.

When should a company in Lisbon file for insolvency?

A company should file for insolvency as soon as it is unable to pay its debts as they become due and no viable restructuring option exists. Delays can result in legal consequences for directors.

What are the chances of saving a business through restructuring?

The chances depend on the company’s financial condition, willingness of creditors to cooperate, and how early in the distress cycle restructuring begins. Early intervention generally increases the likelihood of success.

Can individuals file for insolvency in Portugal?

Yes, both individuals and companies can file for insolvency. Individuals may also use payment plans to avoid insolvency under specific circumstances.

What is the Special Revitalization Process (PER)?

PER is a court-supervised procedure designed for debtors facing severe financial difficulties but not yet insolvent. It allows temporary protection from creditors while negotiating with them to reach a restructuring agreement.

Are directors personally liable for company debts?

Generally, company directors are not held personally liable unless they commit misconduct, such as failing to file for insolvency in a timely manner or acting fraudulently.

How are creditors paid in an insolvency?

Creditors are paid according to a priority list set in Portuguese law. Secured creditors are paid first, followed by preferential, unsecured, and lastly subordinated creditors.

What happens to employees if a company goes insolvent?

Employees’ rights are protected by law, including priority payment of outstanding wages. The Social Security system may also cover certain amounts if the company cannot pay.

Does insolvency affect personal credit in Portugal?

Yes, insolvency proceedings have a significant impact on an individual’s or company’s creditworthiness, affecting access to finance for a period after the proceedings.

Is it possible to challenge an insolvency declaration?

Yes, a debtor or creditor may challenge an insolvency declaration in court by presenting evidence to contest the status or liabilities.

Additional Resources

For further information and assistance, the following resources, organizations, and governmental bodies in Portugal can be invaluable:

• Commercial Courts (Tribunais de Comércio) - handle insolvency and restructuring matters
• DGSJ - Direção-Geral da Política de Justiça - provides guidance and official information on legal procedures
• Bar Association of Portugal (Ordem dos Advogados) - for finding qualified lawyers specialized in insolvency and restructuring
• Portuguese Business Confederation (CIP) - offers support to businesses in financial distress
• Consumer Support Organizations - provide information for individuals facing debt problems

Next Steps

If you or your business are facing financial difficulties in Lisbon, early action is crucial. Keep the following steps in mind:

• Gather all relevant financial documentation and details of debts
• Consult a qualified lawyer experienced in restructuring and insolvency for an initial assessment
• Discuss available legal options, including restructuring processes or insolvency filings
• Collaborate with your lawyer to develop a tailored strategy and initiate negotiations with creditors if appropriate
• Follow legal advice closely to ensure compliance with deadlines and legal obligations
• Stay informed and keep detailed records of all proceedings

Taking timely legal advice can protect your rights, help preserve business value, and improve the prospects of overcoming financial distress in Lisbon, Portugal.