GLOBAL RESTRUCTURING & INSOLVENCY GUIDE UPDATED MAY 15, 2020 TRANSACTIONAL POWERHOUSE Leading and closing three deals a day GLOBAL RESTRUCTURING & INSOLVENCY GUIDE | 1 Welcome to the 7th edition of the Global Baker McKenzie Restructuring Debra Dandeneau & Insolvency Guide. The Guide has been compiled by Baker McKenzie Chair, Global Restructuring lawyers experienced in the practical aspects of restructuring and & Insolvency Group insolvency. It should provide you with a helpful reference tool to +1 212 626 4875 understand the numerous insolvency and restructuring regimes that [email protected] may affect your business. In this edition, we also answer the questions we most frequently receive regarding the impact of COVID-19 on the insolvency landscape. Our lawyers have been advising on some of the largest and most complex multijurisdictional restructurings, recoveries and insolvencies for many years. Bringing together experts from a variety of disciplines, the Restructuring & Insolvency Group at Baker McKenzie provides a full service offering. In addition to our dedicated restructuring lawyers, our team will call on the expertise of colleagues in our wider group, including specialists in finance, capital markets, M&A, employment, tax, dispute resolution, real estate, intellectual property and international commercial & trade. Together we apply our experience in providing complete cross-border restructuring and recovery solutions. As ever, a brief overview such as this cannot deal with some of the more detailed issues or circumstances that might arise in particular settings. Please do not hesitate to follow up with us if we can be of further assistance. Contact details for our lawyers in each country can be found at the end of the Guide. Please visit our R&I blog at restructuring.bakermckenzie.com for further insights from our group. 2 | GLOBAL RESTRUCTURING & INSOLVENCY GUIDE ARGENTINA ............................. 4 HUNGARY ............................ 166 SPAIN ..................................... 351 AUSTRALIA ..............................13 INDONESIA ........................... 173 SWEDEN ............................... 370 AUSTRIA ................................. 36 ITALY ......................................182 SWITZERLAND .................... 379 BELGIUM ................................ 43 JAPAN ....................................197 TAIWAN ................................389 BRAZIL .................................... 49 KAZAKHSTAN.......................208 THAILAND ............................ 395 CANADA ................................. 59 MALAYSIA .............................216 THE NETHERLANDS .......... 404 CHILE ......................................69 MEXICO ................................ 229 TURKEY .................................415 CHINA ......................................77 MOROCCO ............................ 239 UKRAINE ..............................424 COLOMBIA .............................90 PERU ..................................... 249 UNITED ARAB EMIRATES ..440 CZECH REPUBLIC ................. 101 PHILIPPINES ........................ 256 UNITED STATES ...................449 ENGLAND ...............................111 POLAND ................................272 VENEZUELA ..........................457 FRANCE .................................123 RUSSIA ...................................291 VIETNAM ..............................465 GERMANY .............................139 SINGAPORE ..........................304 HONG KONG ........................150 SOUTH AFRICA .....................331 ARGENTINA ARGENTINA Extrajudicial voluntary agreement Reorganization proceedings Liquidation bankruptcy INITIAL CONSIDERATIONS Can you take security over all Generally yes, before filing for the reorganization After the beginning of the reorganization As from the start of the liquidation proceeding, types of assets, including working or the ruling setting forth the start of the proceedings, no further security interests can be no further security interests can be granted over liquidation bankruptcy. granted over the assets of the debtor for credits the assets of the debtor. capital? due before the beginning of the reorganization proceedings. The debtor can grant security interests for new creditors after the start of the reorganization proceedings. What is the nature of the process? It is an alternative to the reorganization Court process leading to a composition Bankruptcy basically means judicial liquidation proceedings, by means of which the debtor agreement with creditors in order to avoid of the legal entity. Bankruptcy is only reached enters into an out-of-court settlement with its the debtor's liquidation. The debtor is allowed through the intervention of the commercial creditors. The settlement is filed with a court to restructure its debt if the appropriate court corresponding to the jurisdiction where for its approval. Once the approval is granted, requirements are met. the company is registered. There is no minimum the agreement shall be enforceable vis-a-vis all number of creditors. For bankruptcy declaration creditors, even those who did not participate in it. purposes, just one unpaid creditor is enough, or the debtor's company may even request its own bankruptcy. Upon bankruptcy declaration, all the debtor's assets are liquidated and funds are duly distributed among the creditors. The bankrupt entity shall be managed by the "síndico" or "bankruptcy liquidator" under the supervision of the competent court. 4 | GLOBAL RESTRUCTURING & INSOLVENCY GUIDE ARGENTINA Extrajudicial voluntary agreement Reorganization proceedings Liquidation bankruptcy What is the solvency requirement? The debtor shall evidence either financial- The prerequisite to file for reorganization In general terms, the basis for becoming economic difficulties of a general nature, or the proceedings set forth by Bankruptcy Law bankrupt is that liabilities exceed the amount suspension of payments of current, due and No. 24,522 ("BL") and its amendments, is the of assets and that the debtor has so-called outstanding debts regardless of the cause or suspension of payments of current, due and "cessation of payments" status ("estado de nature of the debt. outstanding debts regardless of the cause or cesación de pagos"). The court shall declare the nature of the debt. Reorganization includes bankruptcy and determine the starting date of all assets of the insolvent company (i.e., the the cessation of payment status ( "Insolvency debtor's whole estate), with few exceptions Date"), which shall precede the bankruptcy set forth in the BL. Corporations must file for declaration date. The debtor is able to declare its reorganization through its legal representative own "cessation of payments" status. and such resolution must be ratified by a shareholders' meeting within the following 30 days as of the filing. Is there a requirement to In the case of debtors domiciled abroad, the In the case of debtors domiciled abroad, In the case of debtors domiciled abroad, an demonstrate COMI ("centre competent court to intervene in the approval the competent court to intervene in the Argentine court will be entitled to declare of the extrajudicial voluntary agreement shall reorganization proceedings shall be that of the bankruptcy on a foreign entity only regarding of main interests")? be that of the place of its administration, or place of its administration, or the place of its the assets existing within the territory of the otherwise, the place of its main activity, as the main activity, as the case may be. Argentine Republic. case may be. Is restructuring of both secured and Only if all unsecured creditors approve the Only if all unsecured creditors approve the N/A. unsecured claims possible? proposal agreement. proposal agreement. Is there a classification of creditors The debtor must file with the court a Idem extrajudicial voluntary agreement. N/A. and shareholders? categorization proposal of registered creditors, which must be made considering the amount of their credits, the existence of security interests and the nature and cause of the credits. The proposal must have at least three categories: (i) unsecured commercial creditors, (ii) unsecured labor creditors, and (iii) secured creditors. Is there a requirement for voting The approval of the shareholders is not required The approval of the shareholders is not required If the debtor files for its own bankruptcy, approvals by shareholders? for the agreement. Nevertheless, the governing for the agreement. Nevertheless, the governing the same approval as in the reorganization body (e.g., shareholders' meeting) must approve body (e.g., shareholders' meeting) must approve proceedings is required. the filing with the court of the extrajudicial the filing with the court of the reorganization voluntary agreement. proceeding. GLOBAL RESTRUCTURING & INSOLVENCY GUIDE | 5 ARGENTINA Extrajudicial voluntary agreement Reorganization proceedings Liquidation bankruptcy Is there a requirement for voting After the filing of the trustee's report, the judge Shareholders' creditors, whose credits have N/A. approvals by shareholders' will render a decision taking into account the been approved by the judge, can express their origin of the creditors' claims. Shareholders approval of the proposal, with the exception of creditors? whose credits have been approved can vote, those shareholders who are the main controllers with the exception of those shareholders of the company. The main controllers are, for