The Law That Keeps a Dominican Company from Closing Over a Bad Year: Corporate Restructuring in the DR

A hotel chain ends the season with payroll in arrears and suppliers unpaid. The instinct is to close. But since 2015, Dominican law has offered an alternative that many companies, and their lawyers, still do not know well: the restructuring procedure, designed precisely to keep a temporary financial difficulty from ending in forced liquidation.

Law 141-15 on the Restructuring and Liquidation of Companies and Sole-Proprietor Merchants (Personas Físicas Comerciantes) pursues two objectives that are sometimes confused: to protect creditors against a debtor in difficulty, and, where viable, to preserve the company’s operation instead of dismantling it. Only when continuity is not realistic does the process lead to an orderly judicial liquidation.

The rule applies both to sole-proprietor merchants and to companies, whether Dominican or foreign, domiciled or with a permanent presence in the country. Excluded are entities majority-controlled by the State and a specific group of regulated financial actors: banks and financial intermediaries under the Monetary and Financial Law, securities intermediaries, investment fund managers, centralized securities depositories, stock exchanges, and securitization companies. The latter have their own intervention regimes.

A common mistake: waiting for the creditor to act first

In practice, most Dominican companies reach this process too late, when a creditor has already initiated individual collection actions. The law favors those who move first: requesting restructuring before attachments and scattered lawsuits accumulate usually preserves more value, and more room to negotiate with creditors, than waiting to be dragged into the process.

Since 2017, two specific chambers, one in the National District and another in Santiago, with their corresponding courts of appeal, were designated as liquidation and restructuring courts, in compliance with article 236 of the law.

If your company faces liquidity strain, the question is not whether to turn to this mechanism, but when. Our team includes professionals certified as insolvency conciliators and liquidators, and can assess in an initial consultation whether restructuring, and not closure, is the right path for your business.

Do you want more information about our Corporate Insolvency & Restructuring services in the Dominican Republic? Contact Us.

Disclaimer: This publication is not intended to provide advice or suggest a guaranteed outcome as individual situations will differ and the situation may have changed since publication. For specific advice on the information provided and related topics, please contact the author.

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