Asset Powers in a Liquidation Concordat

Legal Article · 12 November 2026
Av. Thomas Andreas Di Constantinople

A concordat by surrender of assets seeks satisfaction of claims by granting creditors power of disposal over the debtor's assets or transferring assets to a third party on specified conditions. Its principal purpose is not invariably to continue the business under the same debtor. It is a distinct, liquidation-oriented concordat model.

Articles 309/a et seq. of the Enforcement and Bankruptcy Law define the content and liquidation framework of this concordat. The duties of liquidators and the creditors' committee are shaped by the agreement and statutory provisions. Private, unsupervised distribution of the debtor's assets is not the same mechanism.

The concordat text must address matters such as the scope of liquidation and the extent to which creditors relinquish rights. Transfer of all or part of the assets, remaining rights, and liquidation expenses must be expressly assessed. The position of secured claims is also subject to relevant special provisions.

Realisation and distribution of assets by liquidation bodies follow rules protecting creditors' common interests. Review of transactions, reporting, and remedies form part of the statutory framework. Confirmation does not mean that ownership of every asset passes directly to a single creditor.

For example, transferring a business intact to a third party may have different economic consequences from selling assets separately. Its effects on creditors and the proposal's statutory requirements must be examined together. The distinction between an ordinary concordat payment plan and this liquidation model lies not merely in the heading but in the allocation of asset powers and the distribution mechanism.

This article has been prepared for general legal information purposes.