Extrajudicial legal protection in Latvia
Extrajudicial legal protection in Latvia
What is the extrajudicial legal protection in Latvia and the procedure of it? How to know – should in extrajudicial legal protection in Latvia process necessarily involve all creditors or involve only major creditors such as financial institutions.
In the case of the extrajudicial legal protection, a legal protection action plan is submitted to the court, which has already been agreed with the majority of creditors. The fast-track action plan must be aligned with the majority of all creditors (including secured) after the amount of the principal claim.
In order to prevent that creditors who voted against the extrajudicial legal protection plan, they would not be penalized by a plan that would adversely affect them. Taking into account the fact that secured creditors participate in the coordination of the plan of the extrajudicial legal protection, the secured creditor’s principal and interest rates can also be reduced proportionally with the majority of secured creditors.
Why do you need the extrajudicial legal protection in Latvia?
What are the benefits of the extrajudicial legal protection in Latvia?
From a practical point of view, a commercial company with good prospects for reaching an agreement with a majority of creditors and there is no risk that individual creditors with individual treatment against a commercial company could seriously jeopardize the development, harmonization and further implementation of the legal protection process plan. If negotiated by agreement with a majority of creditors, the approval of a fast-track extrajudicial legal protection plan of action by a court allows it to become binding on minority creditors as well as obtaining protection under the legal protection process . As soon as the plan of the extrajudicial legal protection in Latvia is approved by the court, the general provisions of the Insolvency Law on legal protection process apply to its execution.
As the statistic shows then entrepreneurs mainly preferred insolvency proceedings; legal protection proceedings and extrajudicial legal protection proceedings in Latvia were less frequently used by the entrepreneurs. Only since 2008 entrepreneurs can use legal protection proceedings (LPP) and extrajudicial legal protection proceedings in Latvia (ELPP) to solve the problem of enterprise insolvency.
Main target of legal protection proceedings in Latvia
The main target of the Insolvency law is to support a debtor/entrepreneur in financial difficulties to fulfill the obligations. Maybe after some procedures entrepreneur can be able to renew solvency. These three procedures are included in Insolvency law when a legal or individual person is in a situation that they can’t get along with financial difficulties:
Legal protection procedures (LPP) and extrajudicial legal protection proceedings in Latvia (ELPP).
Insolvency procedures of a legal person
Insolvency procedures of a natural person
In The Insolvency law are included several methods to use during legal protection procedures – reorganization of the company, financial stabilization and so on.
Law office in Latvia
The Law Office in Latvia Rasa & Esenvalds is not very old Law office in Latvia, but employees are talented persons, they offer the provision of high-quality legal services in court proceedings in Latvia as well as in international arbitrations and the Court of Justice of the European Union. The Law office Rasa & Esenvalds are ready to help with extrajudicial legal protection in Latvia, because not everyone can manage this area. Highly qualified latvian lawyers of the law office combined legal experience with a practical business. A personal approach, selfless commitment and proactive dynamism to each customer are the formula for success.
Advocates of law office in Latvia are very forward-looking and are open for cooperation, so lawyers are members of the Latvian Association of Young Lawyers, the Association of Certified Administrators of Insolvency Proceedings, International Referral Group, INSOL Europe and the Bar of Latvia as well as the international organizations Global International Network.
An extrajudicial legal protection procedure (ELPP) is for companies that have financial problems, the debtors with the good perspective that they can create an agreement with a majority of creditors. If a majority of creditors approves the legal protection proceeding plan, a court can approve LPP plan.
Company restructuring in Latvia
The financial downturn in the year 2007 was one of the main reason for company restructuring in Latvia after 2008. Many companies bankrupted or faced with financial problems by the economic recession. The economic downturn influenced the performance of many companies in Latvia and ended with company restructuring. Since then company owners was introduced with a new opportunity for them – legal protection proceedings in Latvia. Some entrepreneurs thought that financial downturn is only and the main reason that they can not do their business as usual. There are times when entrepreneurs had to think about how to work further, how they are doing business right now and what to do differently. In many cases entrepreneurs decided that something needed to be changed, so company restructuring and legal protection proceedings in Latvia are a very popular decision.