On January 11, 2022, Law No. 9/2022, was published in the Diário da República, which transposes Directive No. (EU) 2019/1023 from both the European Parliament and Council. This diploma brings important and significant legislative changes, with special emphasis on the Code of Insolvency and Corporate Recovery (hereinafter CIRE), which will be briefly analyzed below.

Special Revitalization Procedure (PER)

• Companies now have four months, instead of two months, which can be extended by one more, to negotiate a plan with creditors, however, the ongoing executive processes are suspended;
• Changing the rules for classifying creditors with the creation of new categories;
• The judge takes an active role after the creditors vote on the recovery plan;
• The legislator created a special protection regime for creditors who are willing to finance the company, who will now enjoy a credit on the insolvent estate (up to a limit of 25% of the non-subordinated liabilities) if it is declared insolvent. within two years

Insolvency of Single Persons

• The most significant change is the reduction of the period for exoneration of the remaining liabilities – cession period – from five to three years, that is, the legislator reduced to three years the period after which the exoneration of debts that were not, however, settled. The insolvent will thus be able to reach the fresh start more quickly;
• The trustee can now proceed with the seizure and liquidation of assets that eventually enter the insolvent’s assets during the assignment period, namely in the case of assets and rights acquired by succession in the aforementioned period;
• If the insolvent party fails to fulfill its obligations during the cession period, the legislator now gives it a new opportunity to obtain the exoneration of the remaining liabilities through the possibility of extending, for one time, the cession period.

Corporate Insolvency

• The legislator introduces partial apportionments, in order to avoid the frequent situations in which creditors would wait several years for payment;
• The lists of subordinated credits and people especially related to the debtor become exhaustive.

This diploma will only enter into force on April 11, 2022, and will be immediately applicable to pending cases. However, the legislator established a transitional regime according to which the provisions of articles 17-C to 17-F, 17-I and 18 of the CIRE, with the new wording, will only apply to PER established after its entry into force. Regarding the insolvency proceedings of individuals pending on the mentioned day 04/11/2022, and in which the request for exoneration of the remaining liability has been granted and whose period of assignment of available income in progress has already completed three years at the date of entry into force of this law, it is considered to have ended on that date.

The legislative change analyzed here constitutes an important step in the adaptation of the insolvency and recovery processes of companies to the current world, but still below the necessary and urgent decomplication and clarification of them. It is worth noting the reduction of the cession period in the insolvency of individuals to 3 years.