“The bankruptcy of companies due to Covid-19 will persist”
The 2019 recession and the economic impact of the Covid-19 pandemic caused the bankruptcy of companies for much of this year, a phenomenon that will persist and continue until next year, according to experts.
…Future prospects will depend a lot on the strategy of businessmen and entrepreneurs, according to the partner of the Thompson & Knight law firm, Alejandro Sánchez Mújica.
He said that while next year is going to be worse, because no one knows how strong the recession is going to be, there will be firms that will survive.
He considered that 2021 will be a rougher year, because there is no government support and no recovery is seen, so there will be closures due to non-payment to creditors, suppliers.
He commented that it is probable that the treasury will be left without a source of income, because the government’s resources will decrease. Therefore the phenomenon will hit everyone.
He said that although there are those who will choose to close, there are others who will seek “survival, we must recognize the difficulty and look for alternatives to get ahead … the main objective will be to try to get ahead and return to having a reasonably satisfactory activity.”
He said that successfully overcoming the economic crisis will require agreements between employers and workers, as in cases in which managers decided not to pay dividends to employees or renegotiated debts as a way out of the cash flow problem.
“Before going bankrupt you have to see other alternatives, sit down with suppliers, creditors and see how together you get more terms”, but before closing the first thing is to sit down to negotiate, be creative.