One such example is the request by the developer of the Trump Ocean Club to make use of Chapter 11 of the U.S. bankruptcy code, in order to restructure its debt.

“Chapter 11 is a vital tool for businesses to survive and move forward. If it had existed in Panama, it would have been brought to light in Panamanian law. Unfortunately there is no such legal concept,” said Carlos Saravia, operating manager of Newland International Properties.

The financier Jose Abbo explained that when a company in Panama becomes insolvent, it is usually liquidated, while in the U.S. the law allows companies to be reorganized, establishing a prior agreement with creditors.

“In Europe there have been monumental failures because they have no restructuring mechanisms such as the Americans and the British,” said Saravia.

Meanwhile, Abbo proposes using the Newland case for reference in developing regulations in Panama and warns that in good times, such as at present, such mechanisms should be created in order to enable enterprises to withstand crises in the future.

Source: Prensa.com