Argentina : Insolvency and Creditor Rights Systems
In 1995, Argentina enacted a new modern insolvency law that substantially improved corporate liquidations and rehabilitations. After almost seven years of experience, some legal and institutional weaknesses persist: (1) corporate workouts are diffi...
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| Format: | Insolvency Assessment (ROSC) |
| Language: | English en_US |
| Published: |
Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2002/06/7083112/argentina-report-observance-standards-codes-rosc-insolvency-creditor-rights-systems http://hdl.handle.net/10986/14997 |
| Summary: | In 1995, Argentina enacted a new modern
insolvency law that substantially improved corporate
liquidations and rehabilitations. After almost seven years
of experience, some legal and institutional weaknesses
persist: (1) corporate workouts are difficult in practice;
(2) the unified insolvency regime causes severe problems in
judicial interpretation of many legal provisions, causing
court congestion with insolvency cases; (3) an uneven
playing field discourages rehabilitation; (4) a lack of
insolvency specialization among judges impedes efficiency
and uniformity in large commercial centers; and (5) sindicos
are perceived as lacking objectivity and sufficient
expertise to manage complex restructurings. Liquidation
proceedings take 1-5 years (depending on complexity), while
reorganizations average 1½-2 years in jurisdictions with
specialized judges (Mendoza, Cordoba) and 2-3 years in the
others. To immediately improve the system, a new workout
mechanism should be introduced to deal with systemic levels
of corporate distress. In the medium term, other aspects of
the legal and institutional framework should be improved. |
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