Best Restructuring & Insolvency Lawyers in Uruguay

About Restructuring & Insolvency Law in Uruguay

Restructuring and insolvency law in Uruguay provides a legal framework for individuals and companies facing financial distress. The purpose of these provisions is to offer financially troubled debtors an opportunity to reorganize their affairs or, if necessary, to access an orderly liquidation process that balances the interests of creditors and debtors. The system aims to protect both the ongoing business where feasible and the rights of all parties involved. Uruguay's approach is influenced by international standards while incorporating local characteristics, aiming to maintain economic stability and trust in commercial activities.

Why You May Need a Lawyer

Pursuing restructuring or insolvency can be complex and stressful. Here are some common situations where legal help may be essential:

• If your business is experiencing cash flow problems and is unable to meet creditor demands.
• If creditors are initiating collection actions, or you are at risk of losing essential company assets.
• If you are considering filing for insolvency or entering into a creditors’ agreement.
• If you are a creditor seeking to safeguard your interests in a debtor’s insolvency process.
• If you need guidance through negotiations, court proceedings, or restructuring plans.
• If you require help understanding your rights and obligations under Uruguayan law during a restructuring or insolvency process.

Legal representation is crucial to navigate the procedural steps, negotiate with creditors or debtors, and ensure compliance with all legal requirements specific to Uruguay.

Local Laws Overview

Restructuring and insolvency in Uruguay are mainly regulated by the Ley Concursal (Insolvency Law), which covers both reorganization and liquidation procedures for debtors. The law outlines the process through which debtors and creditors interact, establishes the roles of the courts and trustees, and sets timelines for the various stages of the process.

Some key aspects of Uruguayan restructuring and insolvency law include:

• Voluntary and Involuntary Proceedings: Debtors can initiate proceedings if they are insolvent, and creditors can also force proceedings under certain conditions.
• Reorganization (Concurso de Acreedores): Allows a debtor to propose a payment plan to creditors to avoid liquidation, under court supervision.
• Liquidation: If reorganization is not possible, assets are sold to pay creditors according to the legal order of priority.
• Role of Trustee (Síndico): A court-appointed trustee administers the process, ensures transparency, and protects creditors’ interests.
• Creditors’ Meetings: Key decisions, like approval of a reorganization plan, must be voted on by creditors as a group.
• Protection from Creditors: Once proceedings begin, there is usually a stay on collection actions against the debtor.
• Cross-Border Insolvency: Uruguay recognizes certain aspects of foreign insolvency proceedings, but local assets and creditors are mainly subject to Uruguayan jurisdiction.

Frequently Asked Questions

What is the difference between restructuring and liquidation in Uruguay?

Restructuring (reorganization) involves creating a plan to repay creditors and continue operating the business, while liquidation involves selling off the debtor’s assets to pay creditors and closing the business.

Who can start an insolvency proceeding in Uruguay?

Both individuals and companies may file for insolvency if they cannot pay their debts. Creditors can also request insolvency proceedings against a debtor.

What happens after insolvency proceedings are started?

A court reviews the case. Once admitted, a stay is generally imposed on individual collection actions, and a trustee is appointed to oversee the process.

What is the role of the trustee?

The trustee manages the debtor’s assets, ensures the process is conducted fairly and transparently, and reports to the court and creditors.

How are creditors prioritized in Uruguay?

Uruguayan law determines the priority of creditor payments. Secured creditors, employees, and tax authorities are generally paid before unsecured creditors.

Can companies continue operating during insolvency?

Yes, during restructuring proceedings, businesses can often continue operating under supervision. Operations may cease if liquidation is pursued.

How long does the insolvency process usually take?

The timeline varies. Simple liquidations may conclude within several months, while complex reorganizations can take years, depending on asset values and negotiations.

Are directors or owners liable for company debts?

Generally, corporate structures limit liability, but exceptions exist, especially if there is evidence of wrongdoing, fraud, or mismanagement.

Can foreign creditors participate in proceedings?

Yes, foreign creditors may file claims and participate, but the process will be governed by Uruguayan law regarding claims and asset distribution.

What happens if the reorganization plan is not approved?

If creditors do not approve a proposed plan, or the plan fails, the process usually moves to liquidation where assets are sold to pay creditors.

Additional Resources

If you are facing restructuring or insolvency issues in Uruguay, the following resources and organizations may be helpful:

• Judiciary of Uruguay (Poder Judicial): Handles all insolvency filings and court proceedings.
• Central Bank of Uruguay (Banco Central del Uruguay): Supervises certain financial sector insolvency cases.
• Chamber of Accounts of Uruguay (Tribunal de Cuentas de Uruguay): Provides oversight in public and certain private sector cases.
• Uruguayan Bar Association (Colegio de Abogados del Uruguay): Offers directories for qualified insolvency lawyers.
• Specialized Law Firms: Many law firms provide dedicated services in restructuring and insolvency.

Next Steps

If you or your business are considering restructuring or facing insolvency in Uruguay, early legal advice is critical. Here are the recommended next steps:

• Document any financial difficulties and compile information about your debts and assets.
• Seek consultation with a lawyer specializing in restructuring and insolvency for a legal assessment of your options.
• Consider whether restructuring or liquidation is the right path for your circumstances with professional advice.
• If you are a creditor, consult with legal counsel about how to protect and potentially recover your claims.
• Prepare for legal filings and gather required documentation as guided by your legal representative.

Professional guidance will help protect your rights, avoid common pitfalls, and ensure that the process is managed according to Uruguayan law.