Chilean Dip financing needs push

Author: Edward Price | Published: 28 Sep 2016

Lawyers in Chile are positive about Dip financing, first introduced in the country in 2014 – but there hasn’t been much activity so far.

In replacing the old bankruptcy law, the act introduced a new reorganisation proceeding headed by a veedor (or observer, similar to the US Bankruptcy Code Chapter 11) and, too, a Liquidation Proceeding headed by a liquidator (in this case similar to the US Bankruptcy Code Chapter 7) for both corporations and individuals. Dip financing loans in Chile also rank as senior to the claims of existing creditors.

According to Felipe Moro, partner at Carey in Chile, the enactment of the CIA has fundamentally changed the balance of the insolvency framework, turning from a pro-liquidation regime to focusing more on reorganisation and going concerns.

"The CIA is more flexible and gives the debtor and its creditors numerous tools to keep the company, and producing revenue as a...