My WordPress Blog Tue, 05 Feb 2019 14:57:30 +0000 en-US hourly 1 Restructuring of corporate debt Tue, 05 Feb 2019 14:57:30 +0000

Often entrepreneurs are in a position to no longer be able to follow the agreements made with banks or other creditors, either for the period of crisis in place, either for wrong business choices or for any other reason. In these cases it is possible to run for cover before it is too late through the institution of ‘corporate debt restructuring’.

Companies of any type (including agricultural) and size can take advantage of this institute (the individual company is also envisaged), but it is necessary that the debt exposure be such as to bring the company to the cessation of the activity.

What is it about?

This is a proposal for an agreement with which the company presents to its creditors a plan to reduce the pressure of debts and, consequently, allow the business to emerge from the moment of crisis. If the agreement is reached, it will then be entered in the business register. Given the technical times, in many cases sufficiently dilated, it is possible to draw up the agreement and, on the basis of creditors’ approval, use it to avoid the aggression of some assets belonging to the company’s assets, waiting for them to be fulfilled. the various formalities.

This act consists of a report written by an expert in which he comes attested to the veracity of the company’s economic data and the feasibility of the plan that underlies the restructuring. In this plan the methods and times of return must be specified . 

The entrepreneur in a state of crisis has the faculty to request the approval of a debt restructuring agreement , but it is also essential that the creditors join the plan, reaching at least 60% of the total coverage of the debt exposure .

Restructuring of corporate debt

Creditors who do not participate (as long as they do not exceed 40%) still have the right to a full reimbursement of the credits claimed, but can not oppose the completion of the debt restructuring . The calculation of the aforesaid percentages is done on the “weight” of the credit, therefore by quota and not by “witness”.

What debts are allowed?

In general they can be included in the debt restructuring agreement:

  • financial debts (for example mortgages, loans, leases, etc.) that are claimed by credit institutions;
  • trade payables (to the various suppliers of goods and services);
  • payables to the tax authorities (including those towards Equitalia);
  • payables to INPS .

How can the debts due be extinguished?

In the restructuring plan the debtor must specify how he intends to meet his debts; can make different types of proposal, remembering that it is always the lender’s right to decide whether to accept the conditions or not.

In particular, among the various opportunities, he can propose:

  • an extension of the payments due (especially with the Revenue and with INPS).
  • the conversion of debts into shares and their transfer to creditors: the corresponding capital increase must be made equal to the book value of the debt;
  • the transfer of assets to or to creditors. With this solution it will be necessary to carry out the transfer from the financial statements as the accounting value of the debt which will be extinguished (or reduced);
  • the issue of a convertible bond loan in shares for an amount corresponding to the carrying amount of the debt.

Advantages and disadvantages

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As for the advantages we can list some of them:

  • creditors may decide to renounce all or part of the credits claimed, or interest accrued;
  • Creditors may suspend any ongoing foreclosure actions. The suspension request is to be made to the court and is possible if a pre-agreement has already been reached with the sufficient number of creditors;
  • in the period of agreement, funding can be requested to help overcome the crisis;
  • compliance with the few legal restrictions for the preparation of the debt restructuring plan;
  • possibility to close agreements or transactions with the tax authorities or with INPS.
  • the entrepreneur can continue the management of his business;
  • found the agreement can not be promoted new foreclosures or precautionary actions;
  • exemption on the application of the rules that can lead to the reduction of capital due to losses and the relative dissolution of the company.

As for the disadvantages, the most important one is related only to the part of receivables not included in the restructuring that must still be paid in full. For the payment of these there are times that must be respected, namely:

  • if the credits left out of the agreement have expired on the date of the restructuring agreement, the creditor will not be able to request payment before 120 days have passed;
  • if they have not yet expired on the date of approval, the deadline is always 120 days but starts from the date of their expiry.

How is the procedure?

The process for the debt restructuring to be valid must follow the following steps:

  • request for restructuring to the territorially competent court. For this first stage two paths can be followed: that of the ordinary agreement (filing of the application for approval of the agreement with the support of the majority of creditors) or through a proposal for an agreement to obtain the necessary time to formalize it;
  • filing of the agreement and registration in the register of companies;
  • hearing for the approval that serves to verify the veracity and the existence, for example, of the agreement with 60% of creditors;
  • ‘Execution’

Debt restructuring agreement: who to contact

To obtain a debt restructuring agreement, mediation and negotiation skills are needed to propose convincing corporate debt restructuring strategies to creditors. According to the art. 182 bis of the Bankruptcy Law the request must be accompanied by “a report drawn up by a professional, appointed by the debtor (…) on the veracity of company data and on the viability of the agreement with particular reference to its suitability to ensure full payment of foreign creditors “.

Furthermore, it is important to perform an analysis of the bank contracts at the base of the debt, to check for any critical issues, to be exploited, through a financial report, during negotiations with the creditor banks (for example, the presence of bank interest or usury ).

For this reason, to undertake a process of debt restructuring it is essential to rely on professionals specialized in the recovery of financial losses that can help the debtor with an assisted negotiation in the resolution of disputes and conclude beneficial debt restructuring agreements.

If you are an entrepreneur who can no longer cope with the debts incurred and you do not want to lose everything you have invested in … contact us and request your FREE advice by filling out the FORM BELOW!

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Mortgage loan: consequences of the 2018 crisis simulation Tue, 25 Dec 2018 15:04:19 +0000

Since the beginning of the year, the Canadian federal government has introduced a new rule to be met before a mortgage is granted. Any borrower wishing to resort to an uninsured conventional mortgage must pass the stress test . Is it a drag on the purchase of a new home ? Everything depends. Here are our explanations.

New stress test: what is it

If you are not yet familiar with the new stress test, here is a brief recap. The purpose of this audit is to help you repay your mortgage if interest rates rise . The reason is simple: after years of flat rates, they began to recover from 2017. The federal government wants to ensure that citizens who borrow will be able to cash the financial impact of a lawsuit. of the trend.

The differential that you must be able to assume was set at 2% . For example, if your 5-year rate is 3.3%, you must have sufficient income to assume a 5.3% interest expense. This is not a novelty in itself: insured mortgages (down payment of less than 20%) have already been submitted since 2016.

Why this new crisis simulation?

To prevent Canadians from finding themselves in financial difficulty while the trend is up rates. After almost a decade of low interest rates, you have to get used to the possibility of rising rates. The risk is all the greater because of real estate valuations in Canada.

Is it harder to buy a house in 2018?

Is it harder to buy a house in 2018?

It will not be especially difficult to buy a house in 2018 because of the stress test. But you may need to review your ambitions somewhat downward. This measure could have favorable consequences, namely to curb the rise in real estate prices in Quebec because of this mechanical decline in the purchasing power of first-time buyers.

Should I postpone my purchase?

Difficult to answer this question as personal factors influence the response. Is the budget you can get through your mortgage really insufficient to cover your needs? Are you going to risk missing out on an opportunity that may not be represented anytime soon? Whatever your situation, you have every interest in not rushing.

More than ever, shopping for the best mortgage rates and favorable terms is crucial. To achieve this, you can count on Vincent Le Saux, mortgage broker in Montreal and Brossard . I am at your disposal to answer all your questions on the simulation of crisis or other, without engagement. Opportunity to meet you at the address of your choice in the region ( Verdun , Outremont, Ville-Marie, etc.).

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Promise to buy a house: to know before committing Fri, 07 Dec 2018 14:40:08 +0000

The promise to buy a house is a document that is not lightly signed.

The signing of such a contract has legal consequences. Here’s everything you need to know before you commit by signing the promise to purchase a home. With, the elements that will have to be included at your request to protect you.

Offer to purchase: definition

Offer to purchase: definition

The offer to purchase, or promise to purchase, is a contract that governs the future sale of real estate. Being a contract, this promise commits you to hold it, otherwise you risk being sanctioned by a financial penalty. That is why it is necessary to take good knowledge of all its clauses. If you sign and then realize that a detail is crummy, it could cost you a lot. Indeed, in the vast majority of cases cancellation without costs is not possible. A major exception however: if it is a new property, you have a right of withdrawal of 10 days (with or without payment of a penalty depending on the contract).

Promise to purchase: the things to watch out for

Before committing yourself, you must obtain answers to the following questions:

  • Has the property been damaged, has it been compensated by an insurance company?
  • Is the property subject to legal proceedings (class action, complaint against the builder, etc.)?
  • Is the land on which the property is located in a flood zone on an old marshland?
  • If it is an old property, how much was it acquired by the current owner?
  • Evaluation of the market value of housing (via an expert or by comparing with selling prices in the area where the property is located).
  • Is the property subject to easements?

What the offer to purchase must include

What the offer to purchase must include

It is of course the seller who writes the offer to purchase. But, nothing prevents you from imposing the addition of your clauses. The promise to purchase should for example provide that in case of refusal of mortgage, the promise is canceled without charge. You can also ask the seller to provide a report on the condition of the house, which confirms that the house has no major defects. If you already own a house or condo whose proceeds of sale are used to finance your purchase, you can also include a clause stating that the promise to purchase will be executed once your own transaction is finalized.

If you are granted with the owner on the inclusion of certain elements of the contents (furniture, children’s games in the garden, etc.), include these agreements in writing in the promise. On the contrary, if you absolutely want to see old things disappear, mention it also on the document.

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