Corporate recovery in Portugal rests on two principal instruments: the Processo Especial de Revitalização (PER) — the court-supervised special revitalisation process — and the Regime Extrajudicial de Recuperação de Empresas (RERE), the out-of-court corporate recovery regime. Understanding how the two differ is essential to choosing the route best suited to each company's particular circumstances.
What Is the PER?
The PER is a judicial mechanism provided for in the Portuguese Insolvency and Corporate Recovery Code (CIRE) that allows a company in financial difficulty, or facing imminent insolvency, to negotiate a recovery plan with its creditors under the supervision of the court.
- Nature: A judicial process under court supervision
- Timeframe: Negotiations of up to three months (extendable by one month)
- Protection: An immediate stay of enforcement proceedings and legal actions
- Approval: A two-thirds majority of recognised claims
What Is the RERE?
The RERE is an out-of-court mechanism, introduced by Law no. 8/2018, which enables confidential negotiations between a company and its creditors without direct court involvement during the negotiation phase.
- Nature: An out-of-court, confidential process
- Flexibility: Greater freedom in structuring the agreement
- Costs: Generally lower than those of the PER
- Confidentiality: Negotiations are not a matter of public record
The choice between PER and RERE ultimately turns on the degree of consensus among creditors and the urgency of court protection. Companies with more stable creditor relationships tend to be better served by the RERE.
When to Choose the PER?
The PER is particularly well suited to situations where the company requires immediate court protection against enforcement proceedings, or where a large number of creditors hold divergent positions. Court supervision provides a formal framework that can prove necessary in more complex cases.
When to Opt for the RERE?
The RERE is the natural choice where a basis for negotiation already exists with the principal creditors, and where confidentiality is an important factor in preserving the company's standing in the market. The flexibility of the process allows for more creative, tailored solutions.
The Comparison in Brief
Both mechanisms pursue the same objective — the sustainable recovery of the company — but by distinct routes. Case-by-case analysis, with the support of specialist advisers, is essential to maximising the prospects of success.
At Ravina Promissora, our multidisciplinary team supports companies throughout the recovery process, from the initial diagnosis to the implementation and monitoring of the approved plan.