ANDORRA Law and Practice Contributed by: Miguel Cases, Marc Ambrós and Marta Felipó, Cases & Lacambra
4.3 The End of the Restructuring, Rehabilitation and Reorganisation Procedure The involvement of judicial authorities is necessary to confirm the restructuring plan. Once all creditors have been accepted, the debtor in a rehabilitation and reorganisation procedure must propose an agree - ment which must be accepted by all creditors. The proposed restructuring plan must detail the specific measures that are considered appropriate to restore the liabilities, identifying the proposed amount, the term as well as the guarantees. If the debtor fails to present an agreement, the procedure will automati - cally become a bankruptcy procedure. The proposed restructuring plan will be considered accepted, when it obtains the favourable vote of creditors, whose credits add up to three-fifths of the debtor’s liabilities, deducting the credits of those who had exercised their right of abstention – ie, those privi - leged by real guarantee, bail or personal work. If the proposed restructuring plan is not approved by the creditors, another proposal can be submitted for discussion and approval by any creditor. If this proposal is approved by at least three-fifths of the creditors, the debtor must accept it. The debtor can request the court grant them a term not exceeding eight working days to state whether or not they accept the proposal of arrangement or agreement. If none or the proposals are accepted, the procedure becomes a bankruptcy. After approving the proposed restructuring plan, the debtor can freely administer and dispose of its assets. Failing to observe the terms of an approved restruc - turing plan will result in its annulment. The plan will also be cancelled if: • fraud was committed by the debtor by hiding assets or increasing liabilities; and • if the debtor is condemned for fraudulent bank - ruptcy.
The judge in charge of the judicial procedure will declare a restructuring procedure when the debtor is entitled to propose a serious agreement, because the economic situation of the business or company may be restored, provided that serious misconduct has not been committed. If these conditions are not met, the judge will declare a bankruptcy procedure. 4.2 Statutory Restructuring, Rehabilitation and Reorganisation Procedure The decree by which the judicial arrangement is declared entails, from the day it is issued, that the debtor must be assisted by the administrator to per - form any activities concerning the administration and disposal of their assets. If the debtor refuses to exe - cute a decision that is necessary to safeguard their assets, the administrator may proceed as they deem most appropriate, after being authorised to do so by the judge in charge of the proceeding. They may also request the judge’s authorisation to adopt precaution - ary measures aimed at collecting receivables or carry - ing out acts necessary to protect the debtor’s assets. The debtor’s activities and, in particular, the operation of the business or company, may continue if author - ised by the judge in charge of the procedure, as long as they deem it appropriate. They may also revoke this authorisation if necessary. The administrator must notify the judge of the results of the debtor’s activities and the development of the business or company at least every three months, on the last business day. The Andorran law does not provide specific circum - stances under which third-party or non-debtor releas - es are permitted. An automatic stay is imposed against individual credi - tors’ claims, excluding those with a special privilege, security or mortgage. Restructuring and reorganisation procedures under an insolvency scheme are submitted mandatorily under Andorran law; therefore there is no possibility to opt for arbitration instead of court proceedings.
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