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  • Archive from category "Ana Carles"
March 3, 2021

Category: Ana Carles

The Insolvency Law in Panama

Monday, 28 October 2019 by webmaster

Analissa Carles, Associate, Morgan & Morgan

On May 19, 2016, the concept of a “Bankruptcy,” as the legal term was defined, ceased to exist under Panamanian law. Law 12 of 2016 (the “Insolvency Law”) entered into force on that date and introduced new proceedings into our legal system. These proceedings are referred to as Reorganization and Liquidation.

The enactment of the Insolvency Law sought not only the protection of the rights of creditors, but also to achieve a differentiation between “efficient” and “non-efficient” companies, depending on the reasons and circumstances that give rise to their insolvency status.

Reorganization

For “efficient companies”, the law introduces the “Reorganization Proceeding,” the main purpose of which is the recovery and continuation of the company as an economic unit and employer.

A Reorganization Proceeding pursues similar objectives as the bankruptcy protection provisions established in Chapter 11 of the United States Bankruptcy Code. Thus, a Reorganization Proceeding allows the restructuring of a company’s debt obligations and can be initiated at the request of the insolvent company or by its duly organized creditors through a “Board of Creditors.” The insolvency petition must be accompanied by a series of documents that include, among others, the company’s financial statements, an inventory of its assets and liabilities, payroll obligations and the Reorganization Plan, in which the debtor must provide a financial, organizational, operational and competitiveness restructuring project with the intention of solving the causes that led to the company’s failure to make required payments, its imminent insolvency or foreseeable lack of liquidity.

This Reorganization Plan is significant in that it serves to initiate the proceeding itself. Subsequently, when the creditors formally join the proceeding to submit evidence of their credits, the Reorganization Plan must be subjected to a vote by the established Board of Creditors, who must either approved or reject said plan. The result of this vote will decide whether: a) the company will in effect be reorganized through the execution of said plan; b) the culmination of the proceeding without any agreement, in which case the bankruptcy protections would be lifted and the debtor would have to negotiate with each of its creditors separately; or, c) the Judicial Liquidation of the Company.

Judicial Liquidation Proceeding

The Judicial Liquidation Proceeding, as the name implies, focuses on liquidating “inefficient” companies in a prompt and orderly manner. This can be initiated at the request of the debtor by means of a Voluntary Liquidation or by means of a duly substantiated petition from a creditor, which in this case would be a Compulsory Liquidation.

In either case, the petition must be accompanied by a series of requirements and documentation. In the case of a Voluntary Liquidation petition, provided all requirements are met, the court will issue a resolution declaring that the company is in liquidation.

For Compulsory Liquidation, provided all requirements are met, the request will be accepted and the debtor will be given an opportunity to answer the creditor’s petition. The court will then set a date for an initial hearing. If the debtor opposes the petitioner’s claim against it and the judge deems such opposition to have sufficient grounds, it shall deny the claim and the proceeding shall terminate. However, if the court deems said opposition to have insufficient grounds or if the debtor does not even submit any opposition, the debtor may: a) allocate sufficient funds for the payment of the debt; b) agree with the requesting creditor for the hearing to be suspended in order for the parties to reach an arrangement; or, c) submit to a Reorganization Proceeding. If, however, the debtor does not choose any of the aforementioned options, the judge will issue a resolution for a Liquidation Declaration, with the corresponding legal effects.

It has been interesting to see the development and execution of this relatively new law before the courts of Panama, especially since it also provides for the creation of new Insolvency Circuit Courts, as well as the Fourth Superior Court of the First Judicial District, consisting of three justices elected by the Supreme Court, in full, with exclusive jurisdiction over insolvency proceedings. However, to date, these courts have not been created and, therefore, the Civil Circuit Courts are currently in charge of hearing such proceedings. These circumstances have forced the judges ruling over these cases to become overly reliant on the technical criteria of the Bankruptcy Administrators appointed by them within the proceeding. Consequently, said Bankruptcy Administrators, who serve as an assistant of the Court, must have the legal and accounting capacity to warn of possible irregularities within the proceeding, from the initial scrutiny of the insolvency application, together with all the supporting documentation. They must also be able to determine if, indeed, they are facing an efficient company that can improve its current financial condition, and they must even make recommendations against the aforementioned Reorganization Plan, before it is submitted to the Board of Creditors for their vote. This level of expertise, although not expressly required by law, has become a necessity given the unforeseen preponderance that the expert input of these Bankruptcy Administrators has acquired. 

Conclusions

There are many conceptual and practical elements to analyze in Law 12 of 2016. However, as is often the case, only through the practice and application of this law has allowed both lawyers and financial institutions to fully grasp the challenges ahead. Regardless of the above, the objective of the Law is positive – especially since, previously, a bankruptcy declaration was a de facto death knell for a company. It is therefore worthwhile to focus efforts on maximizing the advantages created under the law in order to obtain the desired results. These, however, will ultimately depend to a large extent on the good will and good faith dealings of both creditors and debtors.

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  • Published in 2019, Ana Carles, Litigation and Dispute Resolution, Litigios y Resolución de Conflictos, Press Room, Publications
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Morgan & Morgan represented Electron Investment, S.A. in an arbitration process filed by Constructora Seli Panamá, S.A. before the International Chamber of Commerce

Monday, 18 February 2019 by webmaster

Morgan & Morgan was part of the team of lawyers that represented Electron Investment, S.A. (“EISA”), in an arbitration process filed by Constructora Seli Panamá, S.A. (“SELI”), before the International Chamber of Commerce (“ICC”).

The request for arbitration was filed by SELI following certain disputes related to the contract for the construction of the tunnels of Pando and Monte Lirio Hydroelectric Projects, a contract that had been terminated by EISA as a result of a series of breaches by SELI, mainly due to failure to meet the deadline for the completion of the works. The construction contract was an EPC (engineering, procurement and construction) using the silver book of the International Federation of Consulting Engineers (FIDIC, by its initials French), where the contractor assumes responsibility for the design and construction of the project, in this case, of the tunnels of the hydroelectric power plants.

The process was under arbitration at law, according to Panamanian law and according to the rules of procedure of the ICC, having seat in Panama City, Republic of Panama. The total sum of the claim filed by SELI amounted to US$94,065,202.00; and EISA, for its part, filed a counterclaim for an amount of US$110,000,000.00.

After the evidence was heard and the corresponding steps of procedure were concluded, the arbitral tribunal issued the final award dated January 29, 2018, communicated to the parties on February 14, 2018, accepting most of the EISA’s claims and ordering SELI to pay EISA the sum of US$22,524,862.58; that after compensating the sums recognized in favor of SELI, results in an amount in favor of EISA of US$14,653,362.12, plus costs and expenses.

SELI subsequently filed a motion for annulment of the award before the Fourth Chamber of General Businesses of the Supreme Court of Justice, which is pending resolution.

EISA is a Panamanian company whose shareholders are Aurel, S.A. (a Panamanian company owned by Grupo Eleta), Compañía Española de Financiación del Desarrollo, COFIDES, S.A. (a Spanish company whose purpose is to provide medium and long-term financing for viable private investment projects abroad in which there is Spanish interest), and Genera Avante, S.L. (a Spanish owned company of Grupo Inveravante).

EISA has two hydroelectric generation concessions that use of the waters of the Chiriqui Viejo, Pando and Monte Lirio Rivers, which together have an installed capacity of 85MW. Monte Lirio started operations in October of 2014, while Pando is still under construction due to delays in the excavation of the tunnel.

José Carrizo and Ramón Varela, partners; and the associates Mayte Sánchez, Ana Carolina Castillo Solís and Analissa Carles, participated in this process.

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  • Published in 2019, Ana Carles, Ana Castillo, Energy, expertise, Jose Carrizo, Litigation and Dispute Resolution, Litigios y Resolución de Conflictos, Mayte Sanchez, Projects, Projects-es, Ramon Varela
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Morgan & Morgan represented a company from the construction industry in an arbitration process against the Panamanian State

Saturday, 21 October 2017 by webmaster

We advised a recognized foreign company in the construction industry that has an arbitration process against the Panamanian State as a result of the execution of a multi-million dollar construction contract, under the rules of the International Court of Arbitration (ICC) including protective measures.

Partner Jose Carrizo, and associates Mayte Sanchez, Ana Carolina Castillo Solis and Analissa Carles, participated in this process.

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  • Published in 2017, Ana Carles, Ana Castillo, expertise, Jose Carrizo, Litigation and Dispute Resolution, Litigios y Resolución de Conflictos, Mayte Sanchez
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Morgan & Morgan represented an electricity generation company in an arbitration process proposed by a contractor

Friday, 22 September 2017 by webmaster

Morgan & Morgan represented a prestigious company dedicated to the development, design, construction and operation of power generation plants, in an arbitration process proposed by the General Contractor of one of its hydroelectric projects, and in which hundreds of millions of dollars were claimed due to an alleging breach of the EPC Agreement. This international arbitration was conducted under the rules of the International Court of Arbitration (ICC).

Partner Jose Carrizo, and associates Mayte Sanchez, Ana Carolina Castillo Solis and Analissa Carles, participated in this process.

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  • Published in 2017, Ana Carles, Ana Castillo, expertise, Jose Carrizo, Litigation and Dispute Resolution, Litigios y Resolución de Conflictos, Mayte Sanchez
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Morgan & Morgan represented an insurance company in an arbitration process to claim a Performance Bond

Wednesday, 16 August 2017 by webmaster

Morgan & Morgan represented an insurance company, in an arbitration through which the Performance Bond given in guarantee is claimed from a subcontractor in a multi-million dollar project of the Panamanian State.

Partner Carlos Ernesto Gonzalez Ramirez, and associates Mayte Sanchez and Analissa Carles, participated in this process.

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  • Published in 2017, Ana Carles, Carlos Ernesto Gonzalez, expertise, Litigation and Dispute Resolution, Mayte Sanchez
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Morgan & Morgan represented a local organization in an arbitration process before the Arbitration Court of Sport

Tuesday, 30 May 2017 by webmaster

Morgan & Morgan advised a local organization in the defense of its interests in an arbitration proposed against it before the Arbitration Court of Sport (Tribunal Arbitral Du Sport).

Associates Mayte Sanchez and Analissa Carles participated in this arbitration process.

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  • Published in 2017, Ana Carles, expertise, Litigation and Dispute Resolution, Mayte Sanchez
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Morgan & Morgan represented a recognized private transport company in an administrative process related to its operation in Panama

Saturday, 15 April 2017 by webmaster

Morgan & Morgan acted as Panamanian legal counsel to an important private transport company in the implementation of a regulatory framework for its services.

Partners Luis Vallarino and Jose Carrizo, and associates Mayte Sanchez, Orlando Tejeira, Emma Cornejo and Analissa Carles, participated in this process.

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  • Published in Ana Carles, Cornejo Emma, expertise, Jose Carrizo, Litigation and Dispute Resolution, Luis Vallarino, Mayte Sanchez, Orlando Tejeira
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Morgan & Morgan carries out pro bono work in Arraijan

Tuesday, 06 August 2013 by webmaster

As part of our CSR strategy, on Saturday August 3rd, 2013, a team of lawyers and volunteers from Morgan & Morgan participated in a Legal Orientation Day held in collaboration with Fundación para el Desarrollo Integral de la Mujer y la Familia (Fundader, for its initials in Spanish), at Arraijan, province of Panama. More than 27 people received free legal assistance and participated in a workshop covering topics related to domestic violence and healthy relationships, emphasizing the importance of equal opportunities for men and women.

The aim of these Legal Open Houses is to promote access to justice and gender equality in the country’s most vulnerable populations.

Attorneys Rolando Milord, Ana Carolina Castillo, Fernando Alfaro, Analissa Carles, Daniel Vargas, Gustavo Pérez (from Fundalcom), as well as volunteers María Velásquez and Yariela González made up the group that provided services for this initiative.

By participating in this conference, Morgan & Morgan reaffirms its commitment to the Pro Bono Declaration of the Americas being the first Panamanian firm signatory of this initiative.

Como parte de nuestra estrategia de RSE, el pasado sábado 3 de agosto de 2013, un equipo de abogados y voluntarios de Morgan & Morgan participaron en una Jornada de Orientación Legal llevada a cabo, en colaboración con Fundación para el Desarrollo Integral de la Mujer y la Familia (Fundader), ubicada en Arraiján. Más de 27 personas recibieron asistencia legal gratuita y participaron de un taller en donde se trataron temas relacionados a la violencia doméstica y promoción de relaciones sanas, haciendo énfasis en la importancia de la igualdad de oportunidades entre hombres y mujeres.

El objetivo de estas jornadas es promover el acceso a la justicia y la equidad de género en las poblaciones más vulnerables del país.

El grupo que prestó sus servicios para esta iniciativa estuvo conformado por  los abogados Rolando Milord, Ana Carolina Castillo, Fernando Alfaro, Analissa Carles, Daniel Vargas, Gustavo Pérez (de Fundalcom); y las voluntarias Maria Velásquez y Yariela González.

Con su participación en estas jornadas, Morgan & Morgan reafirma su compromiso con la Declaración Pro Bono de las Américas al ser la primera firma panameña signataria de esta iniciativa.

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  • Published in Ana Carles, Daniel Vargas, Fernando Alfaro, News
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Morgan & Morgan carries out pro bono work in Curundu

Thursday, 20 June 2013 by webmaster

As part of our CSR strategy, on Saturday June 22, a team of lawyers and volunteers from Morgan & Morgan participated in a Legal Orientation Day at the Kiwanis Curundu Development Center in conjunction with the Kiwanis Club Las Perlas. More than 10 people received free legal assistance and participated in a workshop covering topics related to domestic violence and healthy relationships, emphasizing the importance of equal opportunities for men and women.

The aim of these Legal Open Houses is to promote access to justice and gender equality in the country’s most vulnerable populations.

The group of volunteers who provided services for this initiative was made up by attorneys Albert Samuels, Analissa Carles and Adriana Arango as well as volunteers Argelis Rodriguez, Andres V. Mejia and Johane Carrion. We thank everyone for their cooperation.

By participating in this conference, Morgan & Morgan reaffirms its commitment to the Pro Bono Declaration of the Americas being the first Panamanian firm signatory of this initiative.

Como parte de nuestra estrategia de RSE, el pasado sábado 22 de junio, un equipo de abogados y voluntarios de Morgan & Morgan participaron en una Jornada de Orientación Legal en el Centro de Desarrollo Kiwanis Curundú en conjunto con el Club Kiwanis Las Perlas.  Más de 10 personas recibieron asistencia legal gratuita y participaron de un taller en donde se tratan temas relacionados a la violencia doméstica y promoción de relaciones sanas, haciendo énfasis en la importancia de la igualdad de oportunidades entre hombres y mujeres.

El objetivo de estas jornadas es promover el acceso a la justicia y la equidad de género en las poblaciones más vulnerables del país.

El grupo de voluntarios que prestaron sus servicios para esta iniciativa estuvo conformado por los abogados Alberto Samuels, Analissa Carles, Adriana Arango; y los voluntarios Argelis Rodríguez, Andrés V. Mejia y Johane Carrión. Agradecemos a todos su colaboración.

Con su participación en estas jornadas, Morgan & Morgan reafirma su compromiso con la Declaración Pro Bono de las Américas al ser la primera firma panameña signataria de esta iniciativa.

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  • Published in Ana Carles, News, Probono
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