The creditor should first examine how the restructuring affects the debtor, the assets available to satisfy claims, the allocation of assets, and any existing security. Mere suspicion is not enough to provide a sound basis for the request; relevant contract documents, evidence of the claim, and specific changes should be compiled. The request for security must clearly identify the company concerned and the claim, and explain why the reorganization could put payment of the claim at risk. Depending on the claim, the agreement, and the proceedings, different forms of security may be appropriate, such as a guarantee, a pledge, or another suitable form of security. The amount and duration should be proportionate to the claim being secured and recorded in writing. Special deadlines and procedures may apply to making the request. Security is distinct from filing the claim and from objecting to the reorganization; the creditor should therefore check whether several steps need to be taken in parallel.
Securing a Creditor Claim in a Company Reorganization in Georgia
If a reorganization in Georgia puts the payment of a creditor’s claim at risk, the creditor should consider whether they can demand security. The request for security should clearly explain the claim, the risk, and the protection sought.
Tip
A request for security is well-founded only if the risk to the claim is linked to specific consequences of the reorganization. The form, value, and duration of the security should be appropriate to the claim. Filing the claim, requesting security, and objecting are separate steps and may need to be taken in parallel.