When a black swan event happens, such as the 2008 financial crash or the COVID-19 pandemic, vulnerabilities and inadequacies of insolvency systems become evident. This is due to the impact of high levels of indebtedness, large volumes of non-performing loans (NPLs), and default risks. During these events, judicial insolvency procedures tend to be time-consuming and expensive, either reducing the company’s value (in the case of judicial reorganizations) or preventing an efficient reallocation of assets (in the case of in-court liquidations). Under such circumstances, some countries have promoted the implementation of out-of-court workouts (OCWs) as an alternative method of asset resolution when facing a potential crisis.
The World…
