President Guillermo Lasso submitted to the Constitutional Court (CC). Organic Regulation Law on Business Restructuring, with an urgent qualification in economics, which was sent on Friday, July 7. He also presented Regulation Law on financial support in favor of co-activated users of educational loans, scholarships and financial support.

In the explanation of the first norm, the head of state indicates that the aim of the law is to modernize preventive bankruptcy procedures in the country, equalizing the position of debtors and creditors in an effort to reorganize economically viable companies or, failing that, through the orderly liquidation of companies whose operations are unfeasible.

Among the points of consideration of the project, Lasso states that “the changes experienced in the economic and social orders according to the model of globalization, internationalization of the economy and market opening impose the obligation to propose a series of reforms to the permanent Ecuadorian bankruptcy regime in the Preventive Bankruptcy Law, promulgated in 1997, until establish a regulatory framework that recognizes an efficient and effective business insolvency regime, striving to ensure the operational rescue of economic entities whose line of business is sustainable“.

It is added that by adjusting the control frame business insolvency “It enables the reduction of costs associated with the debt crisis, creates predictability in the placement of loans, provides security to the market, promotes stability and economic growth of the state.”

In this regard, Article 1 of the Regulation states that the regime business insolvency which is regulated in the regulation the law is intended for credit protection, recovery and preservation of viable companies as units of economic exploitation and sources of employment, i orderly liquidation and the efficiency of unsustainable enterprises.

body of law there are 214 subjects, contained in 20 chapters. It contains two general provisions, two transitional ones, ten amendments and two repealing them.

includes topics related to administrative procedure or restructuring; restructuring agreement or concordat; settlement; request for restructuring; current insolvency status, immediate or probable and de facto managers; bankruptcy trustees; loan presentation; contracts and real guarantees in reorganization processes; work, tax and social loans; the effects of tender recognition; negotiation phase, agreement execution phase; financial assistance to companies in crisis; insolvency of business groups, in other respects.

About him administrative restructuring process, The regulation states that all trading companies subject to the control of the Supervisory Authority for trading companies, securities and insurance, including branches of foreign companies located in the country, can benefit from the procedure.

Saying the procedure will not be applied for trading companies that are in the process of termination or liquidation or for branches of foreign companies that have had their work permits revoked. Nor will stock exchanges and other companies regulated by the Securities Market Act, companies regulated by the General Insurance Act and entities regulated by the Monetary and Financial Code be accepted.

To justify the economic urgency of the new project, the president points out, among other points, that, according to the World Bank, maintaining and rescuing viable companies is one of the most important goals of the business insolvency regime.

In this context, he points out that an effective bankruptcy framework would prevent the premature liquidation of viable economic entities.

President Guillermo Lasso also submitted Decree law on financial support in favor of co-activated users of educational loans, scholarships and financial supportwhich was announced a few days ago.

The General Secretariat for Communications of the Presidency (Segcom) reported that the project will 100% eliminate interest, penalties and additional fees incurred by outstanding obligations or payment agreements in education loans and financial grants. It will enable the improvement of the user’s creditworthiness by canceling the reporting of forced actions to the credit bureau.

In addition, people who are unemployed will have a grace period of six months to pay their debts. The convenience of full or partial loan cancellation is granted to those who have a certain degree of disability or suffer from rare or catastrophic diseases. This will trigger the payment of outstanding capital.

In addition to these two projects, there are now four decree law which President Guillermo Lasso submitted to the Constitutional Court since he declared the death cross. Of this, the CC gave way to the tax law and rejected the law on the free zone.