A fresh start

Author: | Published: 11 Jul 2011

A Memorandum of Understanding on Specific Economic Policy Conditionality has been negotiated between the Portuguese authorities and the so-called troika which includes representatives from the European Commission, the ECB and the IMF. It sets forth measures that – if properly implemented – could be used to promote a strong rescue culture for distressed businesses in Portugal. This is a unique opportunity for a fresh start in terms of dealing with distressed companies.

Under the MoU, the Portuguese government commits to carry out a range of actions to preserve the stability of the financial sector. As a main component of this overall policy, the government is required to implement a number of measures directed at improving the restructuring framework, tackling both corporate and household debt.

The document contains two main areas of intervention in the area of corporate restructurings: voluntary out-of-court restructurings on one hand, and restructurings through the court procedure set forth...