The Corona Crisis leads worldwide to critical situations for companies.
In light of this, Digitorney has asked lawyers from various countries specialized in restructuring law for recommendations on what needs to be done and which solutions are at hand to weather the Corona Crisis.
This part of our series focuses on Argentina.
1) When does a company need to file for insolvency in Argentina?
In Argentina, insolvency is governed by the Restructuring and Bankruptcy Law No. 24,522, as amended (the “ABL”). The ABL rules for (a) two restructuring processes: (i) a reorganization proceedings (concurso preventivo de acreedores), that is similar to a Chapter 11 reorganization under the US Bankruptcy Code, and (ii) an out-of-court restructuring agreement (acuerdo preventivo extrajudicial). MORE
2) What liability risks exist for the management in Argentina in a corporate crisis?
From a corporate and financial point of view, managers in Argentine companies (as in all companies globally) are facing difficult times. This is an unprecedented crisis that is affecting not only the companies’ financial situation, but most importantly, their cash flow and operations. MORE
3) Is there any state aid available for companies in Argentina due to the Corona crisis?
The Argentine government has taken several measures to support businesses in Argentina due to the COVID-19 crisis, including those described below. The creation by the Argentine government of a Specific Purpose Guarantee Fund to be applied to the granting of guarantees for facilitating the extension of financing for working capital to Micro Small and Medium Enterprises (MSMEs); and the creation by the Argentine Central Bank of a series of incentives for the extension of credit facilities to MSMEs. MORE
4) What immediate measures should companies from Argentina take if it is affected by the Corona crisis?
Despite all health and safety measures required to be adopted given the circumstances, from the corporate and financial point of view, the managers facing strong cash flow reductions due to the high drop of their activity due to the COVID-10 crisis must adopt all possible measures to protect their cash position and reduce costs and expenses to the largest possible extent (including wages reductions and employees suspensions – employees termination is temporarily suspended in Argentina-), procure access to all supportive measures adopted by the government (including adhesion to moratoriums) and procure access to credit, if available. MORE
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