Legal alert no. 54
Legal Alert no. 54 – Statute of the Corporate Recovery Mediator
On February 22nd 2018, it was published, in the Official Gazette of the Republic of Portugal, the Law no. 6/2018, which establishes the statute of the corporate recovery mediator.
Under this Law, the corporate recovery mediator (hereinafter referred to as mediator) is the person who shall assist debtor companies that, under the provisions of the Insolvency and Corporate Recovery Code (CIRE), are in a difficult economic situation or in an insolvency situation.
The mediator has to analyze the economic and financial situation of the debtor, to assess, jointly with the debtor, its prospects of recovery and assist the debtor with the drafting of a restructuring agreement proposal, as well as with the negotiations to be held with the creditors.
The admission to the activity of mediator is permitted to applicants who:
a) Have a licentiate degree and adequate professional experience (minimum of 10 years in company management roles, economic and financial auditing or credit restructuring);
b) Successfully conclude training initiatives regarding corporate recovery mediation, in accordance with the law;
c) Are not in an incompatibility situation for the performance of the mediator activity;
d) Are deemed suitable for the performance of the mediator activity, which shall be assessed by IAPMEI, I.P..
Receivers (judicial administrator) and certified public accountants may be mediators. For this purpose, they shall submit a registration as mediators before IAPMEI, I.P. and successfully conclude training initiatives regarding corporate recovery mediation.
The registration in the mediators lists is submitted to IAPMEI, I.P., that decides over the applicant’s requirement within 30 days after its submission. The mediators lists are public and shall be made available at IAPMEI, I.P.’s website.
Law no. 6/2018 establishes a set of duties to be complied with by the mediators, namely:
a) To act with independence and impartiality under the performance of their duties;
b) To refuse the appointments by IAPMEI, I.P. in case they do not have adequate time and means to provide the required assistance under the assigned files;
c) To hold a civil liability insurance to cover the relevant risk of the performance of their duties;
d) To pay the necessary fees to IAPMEI, I.P.;
e) To attend to the regular training initiatives, set by IAPMEI, I.P.;
f) To provide the necessary information, as per the terms established by IAPMEI, I.P.;
g) To notify IAPMEI, I.P. the conclusion of the assigned files, indicating the relevant reason;
h) To keep confidential all the information disclosed by the debtor and not to use it to their own benefit or to the benefit of others.
Debtor companies interested in the assistance of a mediator shall submit the relevant requirement to IAPMEI, I.P., which shall appoint a mediator within five days as from the reception date of the request.
The mediator fees shall include a fixed part plus a part to be paid in case of completion of a restructuring agreement. The mediator is entitled to be reimbursed for the required expenses under the performance of his activity.
IAPMEI, I.P. is the competent authority to take disciplinary actions regarding the performance of mediators’ duties and to impose the relevant penalties.
Law no. 6/2018 entered in to force on February 23rd, 2018.
To access the complete text of Law no. 6/2018, of February 22nd please click here.