PORTUGAL Law and Practice Contributed by: Manuel Magalhães, Mafalda Ferreira Santos, Francisco Boavida Salavessa and Maria José Lourenço, Sérvulo & Associados
ings for judicial authorisation, as long as the legal requirements are met. Filing a RERE The debtor has no duty to file a RERE, but if a debtor and its creditors want the negotiations aimed at reach - ing a restructuring agreement to have the effects of a RERE, they must sign a negotiation protocol and deposit it in the Commercial Registry Office. The negotiating period cannot exceed three months from the date of the request for deposit of the pro - tocol. During negotiations, the relationship between the parties is governed by duties of co-operation and good faith until the agreement is signed and executed. Creditors who decide to take part in the protocol can - not withdraw from the commitments undertaken in it before the deadline for negotiations has expired, unless there has been a gross breach by the debtor of its duties. Once the negotiation protocol has been deposited, the debtor must maintain the normal course of busi - ness and is prevented from carrying out acts of spe - cial relevance, unless duly authorised by the creditors. With the submission of the protocol or during the negotiations, the debtor may request the support of a business recovery mediator, who provides technical assistance, particularly during the negotiations phase. The protocol affects pending legal proceedings by suspending the insolvency proceedings and extin - guishing any enforcement actions brought against the debtor. Suppliers of services essential to the debtor’s activity are prevented from interrupting the supply of these services during the period of negotiations, for debts for services rendered prior to the deposit of the pro - tocol. The effects of the protocol are not binding on credi - tors who are not involved in the negotiation process. 3.2 Legal Status In the conversion of credits into share capital, share - holders who do not exercise their right of pre-emption
may be disadvantaged by the entry of new sharehold - ers into the debtor’s share capital. Filing a RERE only binds the signatory parties, which means the RERE cannot be imposed on, or modify, any rights of non-subscribers. 4. Statutory Restructuring, Rehabilitation and Reorganisation Proceedings 4.1 Opening of Statutory Restructuring, Rehabilitation and Reorganisation Considering the residual use of the RERE, this section will focus on the PER. The PER is designed for corporate entities that are in a difficult economic situation or in a merely imminent insolvency situation, but still susceptible to recovery. It is a voluntary procedure. A PER is initiated through an application to the court subscribed by the debtor (who must be a corporate entity) and creditors representing at least 10% of non- subordinated credits (or a lower percentage in certain, limited cases), expressing their willingness to engage in negotiations. Alternatively, a PER may be initiated through the com - pany’s submission of an out-of-court recovery agree - ment signed by the debtor and creditors representing one of the majorities needed to approve a recovery plan. In this case, the PER is a shorter procedure. 4.2 Statutory Restructuring, Rehabilitation and Reorganisation Procedure Upon receiving the application and relevant docu - ments for the PER, the court appoints a provisional judicial administrator (PA). This appointment is notified to the company (the debtor) and published online. From the date of the appointment of the PA, the fol - lowing applies for a four-month period, which can be extended for another month (“standstill period”): • all pending enforcement proceedings against the debtor are stayed;
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