Debt restructuring agreements allow the company to conclude a binding restructuring plan with creditors representing at least 60% of total debt (30% for extended-effect agreements), subject to judicial homologation.
Unlike preventive concordat, restructuring agreements do not automatically bind dissenting creditors — except where the extended-effect provisions apply. The adhering creditors must represent the minimum threshold.
The minimum requirement is consent from creditors representing 60% of total debt (30% for agreements with extended effect under Article 61 CCII). The agreement is then filed with the court for homologation.
Homologation produces protective effects: stay of individual enforcement and precautionary actions, and protection of payments made under the agreement from revocatory actions.
If the 60% threshold is not reachable — due to fragmentation of the creditor base or dissent from key creditors — the restructuring agreement may not be the appropriate instrument.
Debt restructuring agreements are preferable where the company has a limited number of significant creditors with whom bilateral negotiation is realistic, where the creditor base is concentrated and the likelihood of reaching the 60% threshold is high.
Preventive concordat is preferable where the creditor base is fragmented, where an extended reduction of dissenting creditors is required, or where the judicial procedure offers material protections not available in a bilateral agreement.
The choice between the two instruments is never abstract: it depends on creditor composition, available cash flows and the time remaining for negotiation.
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