PORTUGAL Law and Practice Contributed by: Manuel Magalhães, Mafalda Ferreira Santos, Francisco Boavida Salavessa and Maria José Lourenço, Sérvulo & Associados
lien, as described in 2.2 Priority Claims in Restructur- ing and Insolvency Proceedings .
In addition, creditors cannot unilaterally refuse to comply with, settle, anticipate or amend essential executory contracts to the detriment of the debtor, in relation to debts constituted before the standstill period, when the only reason is non-payment. During the PER, the exercise of set-off rights by credi - tors is a matter of controversy, especially regarding whether such set-off rights are subject to general civil law rules or the more restrictive provisions of insolvency. Moreover, set-off is subject to the prior authorisation of the PA if it qualifies as an act of spe - cial importance. Claims against the debtor may be traded during the PER, subject to general civil law rules. Secured Creditor Liens and Security Arrangements Creditor liens and security arrangements may be released or affected by an explicit statement in the recovery plan, subject to the equal treatment of credi - tors, and provided no creditor is worse off than the others. On this topic, it is important to highlight the priority of new money. Where this is required for the continuation of the business, it may be secured with liens/security. Both the agreement to accept new money and its liens are immune to annulment in the case of a subsequent insolvency declaration. These investments/loans may be secured by assets of the company, even if such assets are encumbered by pre-existing secured credi - tor liens/security, although the original creditor ben - efits from priority in the enforcement of that security. Moreover, the CIRE grants new money creditors a stat - utory right of lien over all the debtor’s current assets, ranked above the right of lien granted to employees, which is extended to the PER. Equity Owners’ Status The recovery plan does not, in general, change the company’s ownership structure, and equity owners usually retain their interest in the company. Equity owners should be the first to bear the losses of the company in a situation of financial distress; there - fore, it is unusual for them to receive any dividends,
4.5 The Position of Office Holders in Restructuring, Rehabilitation and Reorganisation
As mentioned in 1.3 Statutory Officers (Statutory Roles, Rights and Responsibilities of Officers), the office holder or PA in a PER is mainly responsible for: • receiving the creditors’ claims and drawing up the provisional list of claims; • guiding and supervising negotiations between the debtor and its creditors; • deciding whether to authorise “acts of special importance” to the debtor; and • issuing an opinion on the debtor’s economic situa - tion. 4.6 The Position of Shareholders and Creditors in Restructuring, Rehabilitation and Reorganisation Creditors’ Position During a PER, creditors (see 2.1 Types of Creditors (Secured, Preferential, Non-Preferential and Subordi - nated Insolvency Claims) regarding the categorisation of creditors) have the right to: • lodge their claims; • challenge the provisional list of claims; • negotiate the recovery plan; • vote on the recovery plan; and • request the non-confirmation of the plan by the court if: (a) their situation under the plan is likely to be less favourable than that in which they would find themselves in the absence of any plan; or (b) the plan provides any creditor with an eco - nomic value greater than the nominal amount of its claims. No creditor (except those with claims arising from employment contracts) can enforce their claims against the debtor during the four-month period after the appointment of the PA in the PER (“standstill peri - od”). During the same period, no creditor can carry out insolvency proceedings against the debtor.
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