Facilitating access to justice

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Facilitating access to justice Overview of
LatinAmerican Countries

• DIANA LUCIA TALERO CASTRO
• Legal Advisor
• Superintendency of Companies
• Colombia
• July 16, 2014

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Presentation outline

• I. Secured transactions Law and Registry
  regulations
• II. Proteccion of security rights MSMs access
• III. The current matters of MSMs Insolvency in
  LatinAmerica
• IV. Alternatives for MSMEs Insolvency Proceedings

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I. Secured transactions Law and Registry
regulations

• Secured transactions Law Reform
• UNCITRAL Legislative Guide on Secured
  Transactions
• UNCITRAL Guide on the Implementation of a
  Security Rights Registry

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Multiplicity of Reforms in Latin America

• Peru (2006, reform in process)
• Guatemala (2007)
• Chile (2007)
• Honduras (2010)
• México, (2011, reform in process)
• Colombia (2013)
• El Salvador (2013)
• Costa Rica (2014)
• Nicaragua ( reform in Process)

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II. Proteccion of security rights MSMs access

• Security Rights Registry
• Features
• Notice, not document registration
• Personal Data Base
• Electronic registry time- and cost-efficiency
• Coordination with specialized registries.
• 5. Judicial or Administrative review Processes,
  to protect security rights, (Compulsory amendment
  or cancellation)

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III.Current Matters of MSMEs Exit

• Different Definitions of MSMEs
• Lack of robust insolvency framework to support
  fresh start (Discharge) for entrepreneurs or
  early rescue (Yan Liu)
• UNCITRAL Guidelines may be selectively applied
  (Yan Liu)
• SMEs adopt very different legal forms
• The importance of SMEs in the Economy is not
  matched with a specific set of insolvency rules
  devised for these businesses
• In most modern insolvency regimes there is a
  liquidation and reorganization procedure for
  corporate debtors (in most cases, designed with
  large companies in mind) and a regime for
  personal bankruptcy.The Insolvency of SMEs,
  José M. Garrido, Insolvency and Creditor Debtor
  Regimes Initiative, The World Bank

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III.Current Matters of MSMEs Exit

• Formal insolvency proceedings with high costs,
  very complicated procedure rules, sophisticated
  and complex entry requirements (Jose María
  Garrido)
• Out of court regimes not available for MSMs (Yan
  Liu)
• Not a proper system to deal with insolvency of
  MSMEs (Luis Mejan)
• Informal firms would like to formalize, but are
  prevented from doing so by costly regulations and
  bureaucracy (Mahesh Uttamchandani)

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Overview of Insolvency in some Latinamerican
Countries (2013)

• Perú 414 proceedings www. Indecopi.gob.co
• Colombia 352 proceedings www.supersociedades.gov.
  co
• México 14 asuntos jueces de distrito de personas
  naturales, 13 visitas de verificación, 12
  sentencias de concurso mercantil, 8 convenios, 13
  procesos de quiebra. (gaceta diputados 16 Nov
  2012 al 31 de marzo de 2013)
• Chile New Law
• Guatemala, El Salvador.

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IV. Alternatives for MSMEs Insolvency
Proceedings

• Simplification of business insolvency frameworks
• MSMEs need alternative and ad-hoc insolvency
  regimes that have
• Shorter Time frames, less cumbersome, lighter
  evidentiary requirements, fewer procedural steps,
  more cost-efficient
• Simplification, debtor-in-possession as an
  incentive, plans preservation of businesses,
  maximum return to creditors, satisfaction of
  claims with future income, treatment of personal
  guarantees, out of court solutions
• Specific, special, functional solutions for MSMs.
• The Insolvency of SMEs, José M. Garrido,
  Insolvency and Creditor Debtor Regimes
  Initiative, The World Bank

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IV. Alternatives for MSMEs Insolvency
Proceedings

• Discharge
• ADRs available for MSMs (low costs) or hybrid
  proceedings