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Archivos mensuales: marzo 2023

marzo 31, 2023

Insolvency remoteness is a legal concept that aims to protect assets from the insolvency of a company. In the context of securitization, insolvency remoteness is achieved by creating a special purpose vehicle (SPV) or special purpose entity (SPE) that is separate and distinct from the originator of the securitization.

The SPV or SPE is typically established as a bankruptcy-remote entity that holds the assets that are securitized, such as loans, receivables, or mortgages. The SPV or SPE issues securities, such as bonds or notes, that are backed by these assets.

The primary purpose of the SPV or SPE is to isolate the securitized assets from the bankruptcy or insolvency of the originator. This means that if the originator goes bankrupt, the assets held by the SPV or SPE are protected and can continue to be managed by the servicer or trustee appointed to oversee the securitization.

The insolvency remoteness of the SPV or SPE is achieved through a variety of legal mechanisms, such as the creation of a trust, the use of limited liability companies, or the establishment of a complex web of legal agreements. These mechanisms are designed to ensure that the SPV or SPE is legally separate from the originator, and that the assets held by the SPV or SPE are protected in the event of the originator’s insolvency.

While Colombia has its own legal framework for insolvency, it also has provisions that recognize the concept of insolvency remoteness in the context of securitization.

In Colombia, insolvency remoteness is typically achieved by creating a special purpose vehicle (SPV) or special purpose entity (SPE) that is separate and distinct from the originator of the securitization. The SPV or SPE is established as a bankruptcy-remote entity that holds the assets that are securitized, such as loans, receivables, or mortgages. The SPV or SPE issues securities, such as bonds or notes, that are backed by these assets.

The Colombian Civil Code recognizes the legal validity of SPVs or SPEs and allows them to be established for specific purposes, such as securitization. The Code also establishes the legal framework for trusts, which can be used as a mechanism for achieving insolvency remoteness in securitization transactions.

In addition, Colombia has implemented specific regulations that apply to securitization transactions, such as the regulations issued by the Colombian Financial Superintendency. These regulations establish specific requirements that must be met by the SPV or SPE, such as the requirement to maintain a separate legal existence, to have an independent board of directors, and to maintain separate accounting records.

Overall, while the concept of insolvency remoteness is recognized in Colombia in the context of securitization, the effectiveness of insolvency remoteness mechanisms may vary depending on the legal and regulatory framework of the jurisdiction in which the securitization takes place. It is important for parties involved in securitization transactions in Colombia to seek legal advice and ensure compliance with applicable regulations to achieve insolvency remoteness.

marzo 31, 2023

Cross-border bankruptcy cases in Colombia can present several challenges for both the debtor and creditors involved. Here are some of the challenges that may arise:

  1. Legal and regulatory differences: One of the significant challenges in cross-border bankruptcy cases in Colombia is the legal and regulatory differences that may exist between the debtor’s home country and Colombia. The differences in legal systems, bankruptcy laws, and regulations can make it difficult to determine which jurisdiction will oversee the bankruptcy proceedings.
  2. Communication and language barriers: Language barriers and communication difficulties can pose a significant challenge in cross-border bankruptcy cases. Communication breakdowns can cause misunderstandings and delays in the bankruptcy process, making it difficult to reach a resolution.
  3. Cultural differences: Cultural differences can also play a role in cross-border bankruptcy cases in Colombia. Understanding the cultural norms and practices of the country can help facilitate smoother communication and negotiation.
  4. Recognition of foreign judgments: In cross-border bankruptcy cases, it is crucial to determine whether foreign judgments are recognized in Colombia. If not, parties may need to engage in additional legal proceedings to have the judgment enforced.
  5. Complex debt structures: Cross-border bankruptcy cases in Colombia can involve complex debt structures, such as cross-collateralization and cross-guarantees. These structures can make it challenging to determine how assets will be distributed in bankruptcy proceedings.
  6. Coordination among stakeholders: In cross-border bankruptcy cases, coordination among stakeholders is critical. This includes coordination between the debtor, creditors, lawyers, and other professionals involved in the case. Coordination is essential to ensure that the proceedings move forward smoothly and that everyone’s interests are protected.

Overall, cross-border bankruptcy cases in Colombia can be complex and challenging. It is essential to have a thorough understanding of the legal and regulatory framework, as well as the cultural and communication dynamics involved, to navigate these cases successfully.