As an alternative to insolvency, the debtor (or possibly a creditor) may apply for receivership or succession proceedings by requesting a deferral of the succession to the competent estate court and submitting, among other documents, an interim reorganization plan. Such judicial protection may be requested by the debtor before over-indebtedness occurs. The court shall decide without delay whether or not the provisional moratorium shall be granted for a maximum period of four months. In its decision, the Tribunal shall appoint an interim lawyer, unless circumstances warrant failure to do so. If the circumstances so warrant, the competent probate court may withhold public notice of the granting of the provisional moratorium, provided that the interests of third parties are well protected. In this case, (i) creditors and other authorities are not informed, (ii) recovery proceedings may still be initiated or continued (unless authorized by the debtor) and (iii) a provisional lawyer must be appointed in all circumstances. In the event that it appears that there is no chance of reorganization of the business or of an inheritance contract, the competent estate court shall open insolvency proceedings concerning the debtor. In the event that the moratorium has been provisionally granted (provisional postponement) and if, during the duration of the provisional moratorium, a reorganization of the company or an inheritance contract appears feasible, the court, on a date preceding the expiry of the provisional moratorium, generally authorizes the definitive moratorium for another four to six months (definitive postponement) and appoints a lawyer. The court may also, if deemed necessary, appoint a creditor committee to supervise the procuring entity. The delegate convenes a meeting of creditors which must approve the draft settlement agreement in accordance with certain majority rules.
The contract of succession is submitted to the Conciliation Court for approval. The DEBA essentially provides for three different types of transaction agreements: the ordinary inheritance contract, the inheritance contract with transfer of assets and the bankrupt estate contract. In the event of a definitive moratorium, no recovery procedure may be initiated and ongoing proceedings may be suspended. In addition, the debtor`s power to dispose of his property and manage his affairs is limited. In the event of pledging, the insured party shall not have the right to carry out a private liquidation until the transaction is confirmed by the competent court. . . .