The Code for Bankruptcy and Recovery (“CBR”) was enacted by Law No. 116/VIII/2016, of 22 March 2016, and will come into force on 1 September 2016.
The CBR brings some forward thinking to the Cape Verde legal framework such as the establishment of extrajudicial and judicial mechanisms for the recovery of companies, the insolvency of individuals (including the waiver of the debtor’s remaining liabilities following a probation period, thus enabling a fresh start) and the extension of the powers of the insolvency receiver (who will replace the current bankruptcy receiver).
In parallel, it brings some streamlining measures to the proceedings, such as the almost automatic closure of the file in situations where the debtor’s assets are not enough to afford the proceedings, whilst also allowing, in a clear way, internationalization of the legal proceedings by providing for what it calls secondary insolvency proceedings.
Although only time will bring a more effective and professional use of the CBR, notably regarding the insolvency receiver’s role (examples are the regulation of issues such as the appointment, main duties and remuneration of same), we are confident that the Cape Verde courts and society have now an important legal instrument for the management of insolvent situations.
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