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COVID-19: Legal Insights Insolvency procedures during the state of alert

Considering the economic and financial difficulties caused by the spread of the SARS-Cov-2 virus, Law No. 55/2020 concerning measures for preventing and fighting the effects of the COVID-19  pandemic was passed, which includes, in Section 8, a series of regulations applicable to insolvency matters.

Said regulations consist of amendments to Law No. 85/2014 on insolvency prevention procedures and insolvency procedures, which shall apply during the state of alert and seek to protect debtors facing financial difficulties or insolvency and to limit the number of companies undergoing insolvency.

Relevant highlights:

• Amendments to the conditions for opening the insolvency procedure; 
• Extension of time-limits as regards preventive arrangements with creditors;
• Extension of time-limits in insolvency procedures;
• Regulations allowing enforcement proceedings for the recovery of current claims are suspended during the state of alert.