MACAU SAR, CHINA Law and Practice Contributed by: Calvin Tinlop Chui and Carla Veiga, Lektou
4.2 Statutory Restructuring, Rehabilitation and Reorganisation Procedure Macau’s insolvency regime centres on court-super - vised collective procedures with two principal restruc - turing avenues used pre- or in-bankruptcy: the con - cordata (composition with creditors) and the creditors’ agreement (which may involve a new company tak - ing over assets and operations). Both are judicial in nature, require voting thresholds by value, and are subject to court oversight and confirmation. Macau does not provide a standalone debtor-in-possession preventive restructuring with super-priority financing or cross-class cram-down. Regarding the concordata, creditors may propose amendments to the plan bases whether or not the debtor initiated it. Approval requires acceptance by a majority of voting creditors representing at least 75% of the total admitted claims, followed by court con - firmation. Dissenting creditors may contest within ten days after acceptance. Once confirmed, the concor - data binds unsecured creditors whose claims predate submission to the court, even without individual con - sent. Secured creditors are generally not compelled to compromise security or priority in the absence of consent, full satisfaction, or adequate protection con - sistent with the priority regime. A creditors’ agreement likewise requires approval by creditors representing at least 75% of claims. The clauses of the future deed of incorporation for any vehicle that will carry on the business must be filed within the court’s deadline. Typical terms include: • participation by signatory creditors and designated parties in the new company; • allocation of shares by reference to participating creditors’ claims (in whole or part), with residual liabilities to non-participating creditors deducted as agreed; • retention of the debtor’s assets by the company to the extent they exceed amounts needed to pay preferred claims, subject to secured creditors’ rights to be paid or fully guaranteed at maturity if collateral is retained; and • payment to non-accepting creditors within no more than three years at an agreed percentage, in line
the debtor being declared bankrupt. This proposal includes a condition that the debtor will pay off a cer - tain amount of their debts within a specific timeframe. A concordata can also serve as a short-term suspen - sion of regular loans. The debtor must submit the application at least five days before the first creditors’ meeting, at which the credits will be verified. At the end of the meeting, any person to whom money is owed can propose a con - cordata. To pass the concordata, most creditors must vote in favour of it, with their votes representing at least 75% of the confirmed debts. 3.2 Legal Status A concordata can be reached when 75% of the credi - tors vote in favour. Creditors who do not accept the settlement may, either individually or jointly, contest within ten days after its acceptance. With the court’s approval, the concordata is compulsory for all unse - cured creditors, regardless of whether they accept the settlement, as long as these debts existed before the submission of the concordata to the court. 4. Statutory Restructuring, Rehabilitation and Reorganisation Proceedings 4.1 Opening of Statutory Restructuring, Rehabilitation and Reorganisation At least ten days prior to the meeting for creditors, the debtor can propose a “concordata”. This involves reducing or changing some or all of the owed debts, which may only be a temporary suspension. If there is no concordata, the creditors can enter into a creditors’ agreement, in which they create a limited liability company to carry on the debtor’s business activity. In cases where these preventative bankruptcy meas - ures cannot be reached, the court will declare the bankruptcy.
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