Simplification of procedure to verify credit ratings in insolvency proceedings

On August 25, Decree Law 57/2022 was enacted to specify one of the procedural measures listed in section 18 of Portugal’s Recovery and Resilience Plan submitted to the European Commission.

This section, titled “Economic justice and business environment,” sets out, inter alia, the agenda for the changes to be implemented in this area to increase the efficiency of insolvency proceedings and company recovery procedures.

To achieve this, the Portuguese Government has simplified the procedure of verifying liabilities and credit ratings in insolvency proceedings.

As a result of the amendments to articles 129 and 130 of the Portuguese Insolvency and Company Recovery Code (Código da Insolvência e da Recuperação de Empresas), insolvency administrators are responsible for submitting a list of recognized credits and a proposal for their rating, which is based on the foreseeable structure of the insolvent estate, to enable the judge to ratify the documents if the parties reach an agreement and they do not submit any objections. In theory, this should streamline the procedure.

Decree Law 57/2022 entered into force on August 26, and it applies to pending proceedings in which the list of recognized credits under article 129 of the Insolvency and Company Recovery Code has not yet been submitted.