Insolvency Law at Macau
Macau's insolvency regime is governed by the Macau Civil Procedure Code, the Macau Commercial Code, and the Macau Civil Code, all enacted in 1999. These statutes provide a structured framework for bankruptcy and insolvency proceedings, distinguishing between commercial bankruptcy and personal insolvency. (Insolvency 2024 - Macau SAR. China | Global Practice Guides | Chambers and Partners)
Key Features of Macau's Insolvency Law
1. Initiating Insolvency Proceedings
Debtor-Initiated Bankruptcy: A debtor must petition the court within 15 days of failing to pay debts that indicate an inability to meet obligations as they become due. (Comparisons | Global Practice Guides | Chambers and Partners)
Creditor-Initiated Bankruptcy: Creditors can apply to the court for a bankruptcy declaration, provided they present evidence of the debtor's insolvency and their own claims. (Comparisons | Global Practice Guides | Chambers and Partners)
2. Concordata (Restructuring Agreement)
Definition: A concordata is a proposal by the debtor or creditors to restructure debts to avoid bankruptcy. (Comparisons | Global Practice Guides | Chambers and Partners)
Procedure: The debtor submits the proposal to the court at least five days before the first creditors' meeting. Creditors holding at least 75% of the confirmed debts must approve the proposal for it to be accepted. (Comparisons | Global Practice Guides | Chambers and Partners)
3. Bankruptcy Declaration and Liquidation
Effects: Upon bankruptcy declaration, the debtor loses control over assets, which are managed by a court-appointed bankruptcy administrator. All debts become immediately due, and interest accrual ceases.
Asset Distribution: Assets are sold, and proceeds are distributed to creditors based on a court-approved priority list. Typically, liquidation expenses and secured creditors are paid first, with remaining funds distributed pro rata among unsecured creditors. (Insolvency 2024 - Macau SAR. China | Global Practice Guides | Chambers and Partners)
4. Director and Officer Liabilities
Duties: Directors must act in the company's best interests and are responsible for initiating bankruptcy proceedings if necessary. (Comparisons | Global Practice Guides | Chambers and Partners)
Liability: Directors can be held personally liable to creditors if they breach legal duties or the company's articles of association, leading to asset depletion or creditor harm. (Comparisons | Global Practice Guides | Chambers and Partners)
5. Cross-Border Insolvency
Territorial Principle: Macau follows the principle of territoriality, meaning foreign insolvency proceedings are not automatically recognized. (Insolvency 2024 - Macau SAR. China | Global Practice Guides | Chambers and Partners)
Recognition Criteria: Foreign proceedings may be recognized if there is reciprocity between jurisdictions, the foreign court had jurisdiction, and recognition does not contravene Macau's public policy. (Comparisons | Global Practice Guides | Chambers and Partners)
Practical Considerations
Legal Framework: Macau's legal system is based on Portuguese civil law traditions, with influences from German and Italian law. The official language of legal proceedings is Portuguese. (Legal system of Macau)
Court System: The Court of Final Appeal is the highest judicial authority in Macau, overseeing the interpretation and application of laws, including those related to insolvency. (Court of Final Appeal of Macau)
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