MACAU SAR, CHINA Law and Practice Contributed by: Calvin Tinlop Chui and Carla Veiga, Lektou
Government Claims Priority will be given to claims by the Macau govern - ment for indirect or direct taxes due. These claims are considered to be of public interest and are given prior - ity to ensure the government’s ability to collect taxes. Administrative Expenses Priority is given to expenses incurred in the admin - istration of the bankruptcy proceedings, such as the fees and expenses of the bankruptcy administrator or liquidator. These expenses are necessary for the proper administration of the proceedings and are paid before other claims. Employee and Pension Claims Claims of employees for unpaid wages, salaries and other employment-related benefits and claims of pen - sion funds for unpaid contributions are given priority. These claims are considered to be of high importance for the protection of the rights and interests of employ - ees and pensioners. Official Fees Priority is given to the fees and expenses incurred by the bankruptcy administrator or liquidator for their services in the administration of the insolvency pro - ceedings. These fees are usually paid before other claims in order to ensure the proper administration of the proceedings. 2.3 Secured Creditors In the Macau SAR, secured creditors usually take the Creditors can secure real estate and movable property that requires registration (cars, boats, aeroplanes) by means of mortgages created by public deeds, which are subject to public registration. Items of movable property such as intellectual prop - erty, shares, bank accounts and financial instruments, which do not require public registration, are commonly secured through the creation of pledges. following liens/securities. Mortgages and Pledges Mortgages and pledges bestow upon creditors the right to be paid before ordinary creditors up to the amount of the secured asset.
Lien Retention of title is primarily a practice used by trade creditors and suppliers to retain title to goods sup - plied until the debt has been paid in full. This practice is also commonly employed to secure vehicles, as it
can be registered. Financial Collateral
Financial instruments and funds held in bank accounts may be offered by a borrower to a lender through a financial collateral agreement that benefits from pref - erential treatment in the event of the debtor’s bank - ruptcy.
2.4 Unsecured Creditors General Unsecured Creditors
General unsecured creditors do not have any specific security interest in the debtor’s assets. They have a lower priority compared to secured creditors and are paid after the secured creditors have been satisfied. Priority Unsecured Creditors Certain creditors, such as employees, have preferred status and are given priority over general unsecured creditors. They are entitled to be paid out of the debt - or’s assets before general unsecured creditors. Subordinated Creditors Subordinated creditors have a lower priority com - pared to general unsecured creditors. They are paid only after the claims of the general unsecured credi - tors have been satisfied. 3. Out-of-Court Restructuring 3.1 Out-of-Court Restructuring Process Under Macau law, there is no alternative to bankrupt - cy proceedings. However, under this process and in the early stage of the insolvency, it is possible to have an agreement between the creditors or for the bank - rupt party to request that the court reduce the credit (concordata), which, if accepted by the court, will be proposed to the creditors, who may vote on such a request. A concordata is a proposal that a debtor or one or more creditors can offer to other creditors to avoid
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