Pre-bankruptcy procedure

What is a pre-bankruptcy settlement?

Pre-bankruptcy procedure is a type of a financial company restructuring aiming to establish liquidity and solvency.  The procedure is usually launched by the debtor for their own purposes, or by FINA automatically after 120 days of blockage.

Through financial restructuring in a pre-bankruptcy procedure it is possible to turn short-term liabilities into long-term ones with the possibility of debt cancellation.

 

What are the conditions for introducing a pre-bankruptcy procedure?

  • account blockage, lasting more than 30 and less than 60 days or
  • salary payment more than 30 days late or
  • being threatened by inability to pay salaries.

 

What are the advantages of introducing a pre-bankruptcy procedure?

Unblockage of a business account in just a few days after introducing the procedure, cancellation of the part of the old liabilities in agreement with creditors, installment payment of the old liabilities.

 

The flow of the pre-bankruptcy procedure

After receiving the whole documentation, including the Financial and Operative Restructuring Plan together with around 15 statements and signatures, within 8 days the Court will issue a decision on opening the pre-bankruptcy procedure.

After the decision on opening the pre-bankruptcy procedure is issued, creditors within 15 days must make their claims towards the debtor, followed by debtor's and commissioner's statement about the claims.

When the Court issues the Decision on the determined claims, the debtor will send the Modified Financial and Operative Restructuring Plan.

 

Conditions for accepting a pre-bankruptcy procedure

For the Plan to be voted in and for the pre-bankruptcy procedure to be confirmed, it is necessary to obtain 51% of numerical votes or 66.7% of financial votes.

 

How can we help you

Our company Maneo d.o.o. prepares companies for a pre-bankruptcy procedure and offers a complete support in the procedure, including:

  • creation of the  Financial and Operative Restructuring Plan or creation of the Bankruptcy Plan
  • negotiations with creditors (Ministry of Finances, banks, suppliers) and representations at proceedings
  • consulting and conducting a pre-bankruptcy procedure.
     

So far we have successfully handled more than 600 pre-bankruptcy procedures, including the ones for some of the most famous Croatian companies. Take a look at our reference list.

 

  Creation of financial and operational restructuring plan

It is essential to create a quality Plan as everything depends on it. The better the Plan, the higher the possibility to convince the creditor in its feasibility and, finally, to vote in the pre-bankruptcy procedure. 

The Financial and Operative Restructuring Plan is an economic study created following a strictly defined methodology prescribed by the law. It must contain: a description of the facts and circumstances resulting in conditions for opening the pre-bankruptcy procedure, a calculation of the lack of liquid assets, a description of financial restructuring measures and calculation of their effects, a description of operative restructuring measures and calculation of their effects, a business plan for the period of five years along with a detailed explanation, a planned balance and a proposition of pre-bankruptcy procedure.

 

Maneo  Negotiations with creditors (the State / Ministry of Finance, banks, suppliers)

Together we will negotiate with the Tax Administration, banks and other creditors to ensure the majority prescribed by the law and necessary to accept the pre-bankruptcy procedure. We will create such a financial concept which will be acceptable to you and your creditors, and together we will prove to your creditors that the restructuring plan is sustainable.

 

  Consulting and conducting the pre-bankruptcy procedure

Consulting and conducting the pre-bankruptcy procedure includes the complete service in the procedure and a projection of the voting structure, a creation of the plan of operative and financial restructuring, a creation of other necessary documentation, as well as negotiations with creditors, consulting at proceedings and other consulting services.

 
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