On Wednesday 7. 10. 2020, we conducted and online workshop for those interested on the theme of Pre-packaged Reorganization. Together with invited attorneys and insolvency administrators with special permission, we presented the main benefits of this manner of settling bankruptcies and individual aspects connected with pre-packaged reorganization. With consideration to continuing restrictions connected with the Covid-19 pandemic, this will be an effective solution at certain firms in the coming months, which they can maintain within the Insolvency Act regime.
Jiří Hlaváč, TPA partner, summarized the main benefits of pre-packaged reorganization at the close of the workshop – these lie in filing an insolvency proposal together with a proposal for settling bankruptcy through the form of a reorganization, which would lead to a highly substantial shortening of the time-consuming nature of the whole process. Part of the filing also includes the approval of secured and non-secured creditors.
- Marked shortening of the rehabilitation process (in the range of several months),
- Pre-negotiation and approval of method with the main creditors prior to filing the insolvency proposal,
- The possibility of solution also for firms which would not fulfil the legal criteria for standard reorganization (annual aggregate of net turnover for the last accounting period of at least CZK 50M or at least 50 employees in an employment relationship),
- For business partners, the possibility to maintain mutual business contacts in the future,
- The possibility to select an insolvency administrator and expert to appraise the enterprise.
In connection with pre-packaged reorganization, it has to be stressed that preparation prior to filing one’s own insolvency proposal is crucial and it is highly advantageous to cooperate on the matter with a subject that has practical experience with these processes.