Legal Definitions - concurso

In civil law systems, a concurso refers to a legal proceeding initiated by a creditor (an individual or entity owed money) to recover debts from a debtor (the individual or entity owing money) who is unable to pay all their financial obligations. It is a collective action where multiple creditors may come together to assert their claims against the same insolvent debtor, often leading to a structured process for distributing the debtor's available assets fairly among them.

Here are some examples to illustrate this concept:

• Example 1: Individual Business Owner's Debts
  Maria, a small business owner, has accumulated significant personal and business debts from various sources, including a bank loan, several credit card companies, and a supplier for her inventory. Due to unforeseen financial difficulties, she can no longer make her required payments. One of her creditors, perhaps the bank, initiates a concurso proceeding to recover their loan. This legal action would then involve all other creditors (the credit card companies and the supplier) who also have claims against Maria, aiming to assess her total assets and liabilities and distribute her limited available assets fairly among all claimants according to legal priorities.
  This example demonstrates a creditor (the bank) initiating a legal action against an insolvent individual debtor (Maria) to enforce its claim, which then brings all other creditors into a collective process to resolve the insolvency.
• Example 2: Corporate Insolvency
  "Global Tech Solutions Inc." is a company that has experienced a severe downturn, leading to significant financial distress. It owes substantial amounts to its employees (for unpaid wages), several financial institutions (for business loans), and various vendors for services and supplies. The company's remaining assets are clearly insufficient to cover all these outstanding debts. A major bank, recognizing the company's insolvency, might initiate a concurso. This legal action would consolidate all claims from employees, other banks, and vendors against Global Tech Solutions Inc., establishing a framework to liquidate the company's assets and distribute the proceeds among the creditors according to established legal priorities.
  Here, a creditor (the bank) initiates a legal action against an insolvent corporate debtor (Global Tech Solutions Inc.) to recover its claim, leading to a collective process for all creditors to share in the company's remaining assets.
• Example 3: Real Estate Development Project Failure
  A real estate developer, "Horizon Properties LLC," has several unfinished construction projects and has defaulted on loans from multiple lenders, as well as payments to various construction companies and material suppliers. The combined value of its remaining assets (undeveloped land, partially built structures) is significantly less than its total outstanding debt. One of the primary lenders could file a concurso petition. This would bring all creditors – including other lenders, construction firms, and suppliers – into a single legal process to assess Horizon Properties LLC's total debt and assets, and then determine how the available funds from selling off the assets will be distributed among them in an organized manner.
  This illustrates a creditor (a lender) initiating a legal action against an insolvent debtor (Horizon Properties LLC) to recover its claim, involving all other creditors in a structured distribution of the debtor's assets.