Trade and Commercial Law Assessment - Honduras - Economic ...

TRADE AND COMMERCIAL LAW ASSESSMENT DECEMBER 2004
HONDURAS
D. SUPPORTING INSTITUTIONS
1. Trustees (Síndicos)
Honduran law does not include extensive provisions regarding the qualifications and activities of
bankruptcy trustees. Nonetheless, the duties are clear to a large extent, as detailed above.
2. Intervenors (Interventores)
Rules regarding intervenors are even fewer than those regarding trustees. The intervenors should
be chosen from among shareholders for a business entity’s bankruptcy. Beyond the need for the
intervenor to meet the approval of the court, virtually no other requirements exist.
3. Professional and Business Associations
Professional and business associations are the same as those discussed in the Collateral Law
section of this report.
E. SOCIAL DYNAMICS
Although reform of other commercial laws is proceeding, creating much controversy in the
process, there is no imperative to reform Honduras’s insolvency laws at this time. There is a
feeling that there are few insolvency proceedings in the country because of the lack of either a
tradition or a “culture” of insolvency. Nonetheless, participants at the roundtable held at the end
of this assessment process did discuss insolvency laws and their potential in Honduras, especially
if the laws were reformed to provide discharge of debts. As other commercial laws are reformed
in Honduras, greater attention should be devoted to the insolvency laws.
F. RECOMMENDATIONS
Honduras has no functioning insolvency laws. Its current laws, while well drafted, are out of date
and do not perform the functions and purposes of modern insolvency laws. Nonetheless, the
current law, as contained in the Commercial Code, is better than that in other Central American
countries and might serve as a viable statute if carefully and extensively modified.
To coordinate its insolvency laws with its other commercial laws, and to reduce risk in its credit
market, Honduras should institute the following reforms:
♦ An extensively amended law of insolvency, taking into account the concepts, principles,
and rules included in modern bankruptcy laws such as those promulgated recently in
Eastern Europe and other recent national laws of insolvency. In particular, new laws
should provide for a discharge of all debts upon completion of bankruptcy and should do
away with the concept of blame for the bankrupt debtor.
♦ A new law of civil and commercial procedures and a new law of garantías reales
mobiliarias, both of which take into account and harmonize with insolvency law reforms.
The Honduran Supreme Court currently has before it a draft of a reform Code of
Procedures, which should be carefully reviewed with an eye to eliminating the delays and
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