The Constitutional Court will hear this Thursday, July 20, 2023, arguments from the executive branch on the Business Restructuring Law or the Bankruptcy Law sent by President Guillermo Lasso after the death of the cross. As before, the Court will also receive the arguments of the eleven amicus curiae which have been presented so far.

Previously, the Court established that it requires annual data on how many companies entered into the termination and liquidation procedure in the last ten years. Details of how many companies are assessed to be at risk of starting the process of dissolution and liquidation before the National Assembly takes office and details of how many companies have accepted pre-bankruptcy contracts regulated by the Organic Law on Humanitarian Aid.

This Thursday, the hearing will be held from 10.30 am. The director of the company, Marco López, commented that he will attend the hearing convened by the Constitutional Court to which he and the President of the Republic have been invited. He indicated that the letter sent to him by the Court states that the idea was for the president to present the project, and for the mayor to give an opinion on the urgency and constitutionality of the project.

He explained that he cannot give an opinion on the topic of constitutionality, because he does not have that authority, and even less so when the report on constitutionality is addressed to the highest constitutional authority in the country. As for urgency, he believes that it is a very subjective question that has to do with opportunities.

For López, in this case it would be urgent, especially considering that the law could be a tool that allows companies not to enter the process of liquidation and subsequent cancellation, thus protecting jobs, and by protecting positions also the capacity for consumption and therefore production, in short, the virtuous circle of the economy is protected. The urgency is determined, according to López, by the fact that this law can wait until the new convocation of the Assembly and the sending of a new project. He explained that the climatic effect of El Niño and the extended winter season are beginning to be felt today. Sugar mills do not grind cane, they do not produce sugar or alcohol, the latter with two uses: alcohol used in medicine and for fuel. There is also fear of problems in the rice, shrimp and banana sectors, which are export sectors.

He indicated that, although there is no urgent situation for companies at the moment, the law must be made now, because if work is started only when the situation is already urgent, it will be too late.

He also explained that this new law will replace the Humanitarian Law and ensure that this tool will serve to determine whether a company is viable and should be protected from any civil and administrative attacks, such as embargoes or coercion, that arise in these complex cases.

However, when asked if the law really has the tools to determine whether companies are viable or not, López commented that this issue probably should have been given more room to regulate. He believes that if adjectives without parameters are used, it is difficult to determine what is sustainable, moderately sustainable or infeasible. “These are things that should have been left for the decree or the president or the General Supervision of Societies.”

He confirmed that this law was constructed by the Legal Secretariat of the Presidency. He also indicated that this law burdens the Supervisory Authority with more work, but the operational, technological and personnel potentials necessary for this have not been established.

Eleven of them have been submitted so far. amicus curiae.

César Coronel, from Defensa Deudores EC, publicly announced the law, emphasizing that it is a modern, necessary and urgent regulation for the financial restructuring of companies with liquidity problems. He explains that the persistence of the effects of national strikes and the COVID-19 pandemic, along with possible damages from the El Niño phenomenon, estimated at $3,000 million, require urgent measures to support companies.