San Lorenzo, in free fall: a ruling against it puts it on the brink of bankruptcy

On the same day that Marcelo Moretti unexpectedly reappeared at the Av. La Plata headquarters while on leave due to an investigation into alleged corruption. On the same day that strong rumors about the resignation of Julio Lopardo, the current vice president, once again circulated through the streets of Boedo. On the same day that chaos once again took center stage as San Lorenzo was in free fall, the club received a court notification of a ruling against it that leaves it on the brink of bankruptcy. And now?

Chamber C of the Commercial Court overturned the first-instance ruling rejecting the bankruptcy petition filed by Swiss fund AIS Investment Fund SCA Sicav Raif for a debt claim for a loan taken out during the pandemic (2020). The current amount, including interest, costs, and fines, amounts to $5,300,000.

What does this mean? Since the Court rejected the appeal, the case must now return to the first instance, where Ciclón could be declared bankrupt . Why? The creditor cannot have two open instances, that is, an enforcement action on one side and a bankruptcy petition on the other, since one is an individual enforcement action and the other a collective enforcement action.

So? San Lorenzo's leadership was aware that this was highly likely to happen once the judicial recess ended. That's why they're already working on a strategy with the institution's lawyers.

They know in Boedo that the hourglass is ticking . Once the judge notifies the club that bankruptcy will be declared, it will have just five business days to resolve the situation. How? There are four options: pay, negotiate a new payment plan with the creditor and obtain their acceptance, convert the bankruptcy into a preventive insolvency proceeding, or request the application of the Sports Trust Law (Law No. 25,284), which establishes a special regime for the administration of sports entities in financial difficulties, allowing for the creation of an administration trust with judicial oversight.

This debt arose when the management, then led by Marcelo Tinelli, requested a loan from the Swiss fund to cover various expenses and salaries during the shutdown caused by the spread of the coronavirus. The problem was that it was never repaid, nor was the installment agreement subsequently made honored.