Company reorganization through pre-pack reorganization plan

The aim of this paper is to highlight the pre-pack reorganization plan (PRP or UPPR in Serbian), as an alternative method in resolving the financial difficulties of the debtor, and present its advantages and disadvantages in the implementation, as well as the economic aspects that lead to the downfall of the company. UPPR is a hybrid procedure, which involves the inclusion of the court, but to a lesser extent than the traditional process. This model is more than the restructuring of debt and capital structure. The application of this unique approach implies the fundamental change of the company’s operations as well as its business policy, which eliminates the accumulated debts and negative trends. Pre-pack reorganization plan (UPPR) is a plan that the debtor prepared in cooperation with creditors and submitted simultaneously with a proposal to initiate bankruptcy proceedings. Unlike other solutions, pre-pack reorganization plan may be voted in advance, when the Law of Bankruptcy allows for such an option. This model represents the solution for overcoming the critical situations and avoiding bankruptcy or liquidation procedure.