Instruments · Art. 84–120 bis

Preventive concordat: when it is still viable.

Preventive concordat allows a company in crisis or insolvency to propose a structured repayment plan to creditors. The plan requires creditor approval and judicial homologation. Access conditions must still be met at the time of filing.

Why Timing Is Determinative

It is never too late.
But it can become so.

Preventive concordat is accessible as long as the company has not already been declared insolvent and liquidation proceedings opened. In practice, a credible plan requires that the company retains minimum operational capacity and that resources exist on which to build the proposal.

In a going-concern concordat, the plan must demonstrate that creditors receive more than they would in liquidation. This comparison improves the earlier the process is activated: a functioning business has greater value than one in liquidation.

The CCII introduced the simplified liquidating concordat, available at the conclusion of an unsuccessful negotiated settlement procedure, and the PRO (Homologated Restructuring Plan), which allows differentiated treatment by creditor class without requiring majority approval.

Late access to preventive concordat — when resources are nearly exhausted — reduces the capacity to formulate a credible plan and increases the risk of non-homologation or conversion to judicial liquidation.

Concordat vs Judicial Liquidation

The difference goes beyond the label.

Judicial liquidation (the former bankruptcy procedure) eliminates operational continuity, disperses business value and carries material personal consequences for shareholders and directors. Preventive concordat — particularly in the going-concern variant — preserves operational structure, contracts and commercial relationships.

The outcome is not solely in the entrepreneur's hands: if the plan is not credible, the court will not homologate it. The technical quality of the proposal, its internal consistency and the management of the creditor process determine the result.

Determining whether preventive concordat remains viable — and in which variant — requires analysis of the financial, asset and projected cash flow position. It is not an abstract assessment.

Assessing preventive concordat requires comparison with alternative instruments under the CCII — negotiated settlement, debt restructuring agreements, PRO — which may be more appropriate depending on the stage of distress reached.

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