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