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18 May 2001
The Colombian Superintendency of Corporations has issued several circulars and advisory opinions for the interpretation of Law 550/1999.
Circular 1/2001 outlines some of the factors for determining the competence of government authorities to appoint administrators:
Circular 4/2001 clarifies the functions of the administrator of restructuring agreements, explicitly stating that the administrator must not be a manager of the company and is not entitled to assume this role. The promoter is merely a facilitator, whose principal functions, as defined in Law 550/199 and restated by Circular 4, are as follows:
Under the procedures (known as 'concordato' proceedings) contained in Law 222/1995, which have been suspended for five years by Law 550/1999, creditors were obliged to present their credits within a specified term. Failure to do this meant that the relevant creditor could only seek payment by foreclosing the assets that remained after the concordato agreement was performed or declared terminated because of payment default or breach. The only exception to this rule was that creditors that presented their credits promptly admitted untimely credits in the preliminary or final hearing (at their discretion).
A recent advisory statement from the Superintendency of Corporation indicates that credits that have not been admitted to concordato proceedings for these reasons may still be party to Law 550 proceedings if the company undergoing concordato proceedings decides to switch to Law 550. There is no deadline for the presentation of credits under Law 550; therefore creditors are automatically party to the proceedings. They must be acknowledged by the company in the list of creditors that it provides to the administrator upon initiation of the proceedings. Creditors rights are guaranteed by the fact that failure to include existing credits or inclusion of non-existing credits is a criminal offence.
For further information on this topic please contact Daniel Posse or Alvaro José Rodriguez at Posse, Herrera & Ruiz Abogados by telephone (+57 1 312 3157) or by fax (+57 1 313 0259) or by e-mail (email@example.com or firstname.lastname@example.org).
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The materials contained on this website are for general information purposes only and are subject to the disclaimer.
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