Dominican Republic passes new insolvency law

Author: Zoe Thomas | Published: 27 Jul 2015
The reforms could boost FDI into the Caribbean’s largest economy

A new insolvency law modernising the Dominican Republic’s bankruptcy system was approved by its national congress on Tuesday.

The bill is expected to be enacted by the president this week, after which the judiciary will begin to set up new bankruptcy courts and impose a new system for restructurings.

The changes provide much-needed updates to a system that had its roots in the Napoleonic Code, and which was typically avoided by debtors and creditors. The new approach allows for the restructuring – rather than just dissolution – of insolvent businesses, and should make it easier to repay or negotiate with a large spectrum of creditors.

"For the first time in our history we have a detailed, well thought, modern process that should work well," said Pedro Gamundi, a partner with Squire Patton Boggs in Santo Domingo.

It is hoped that the...