Conditioned Constitutionality of Articles 50 and 51 of the Personal Property Guarantees Law
With ruling C-145 of December 5 of 2018, the Constitutional Court’s Plenary Council declared constitutional item 2, article 50, of the Personal Property Guarantees Law, with the understanding that the faculty granted to the guaranteed creditor will apply provided the debtor’s other goods are sufficient to guarantee payment of the children food obligations and the salary and benefits obligations under the work contract, if any, all of which the respective judge will verify.
It also declared constitutional the term “…[c]onfirmed the reorganization agreement, the guaranteed creditor will be entitled to have its obligation paid with priority over the other creditors being part of the agreement” of item 6, article 50, with the understanding that this right will only apply should the other debtor goods be sufficient to guarantee payment of the children food obligations and the salary and benefits obligations under the work contract, if any, all of which the respective judge will verify.
Finally, it declared constitutional article 51, with the understanding that the manner in which the real guarantees will be treated in the corporate reorganization process will apply to the legal validation process of extralegal reorganization agreements, according to the above.