The new bankruptcy law seeks to restructure the debts of football clubs in crisis.

On July 18, 2023, the Congress of the Republic approved in a second vote a legislative proposal that promises to transform the financial landscape of football clubs in the country. This new bankruptcy framework is now in the hands of the Executive Power, which has a period of 15 business days to express its opinion on its content. The draft sent on July 22 leaves open the possibility that, depending on the Executive's decision, progress can be made towards resolving the financial crises affecting several teams. The regulation is designed to address the situation of clubs facing economic problems, starting with those whose bankruptcy processes are stalled, such as Universitario de Deportes and Sport Boys. Furthermore, it is anticipated that other teams, such as Alianza Lima, Melgar, and Cienciano, may also benefit from this new framework if they meet certain criteria related to their financial crisis. This flexibility underscores the law's objective: to provide a viable exit for struggling clubs. The options available to the Executive are clear: accept the proposal, observe it, or remain silent. If the law is accepted, it will be published in the official newspaper El Peruano and will come into effect immediately. However, if the Executive chooses to observe it, the draft would return to Congress for further analysis. To date, there has been no news of observations from the Executive, leaving the immediate future of this legislation in suspense. Former Chief Officer of Congress, José Cevasco, explained that if the Executive does not express its opinion within the established timeframe, the President of Congress can directly enact the law. This would allow the regulation to take effect the day after the deadline for pronouncement, thus facilitating the financial recovery of clubs without further delays. The roots of this proposal lie in the temporary suspension of bankruptcy processes that was validated by the Constitutional Tribunal in July 2021. This decision left many teams in a state of uncertainty, as the paralysis hindered the implementation of new regulations that could assist in their recovery. The current legislation seeks to address this urgent need and establish a clear path for debt repayment. In this context, Alianza Lima has expressed its opposition to the law, arguing that its enactment could severely impact tax collection and encourage tax evasion. Through a letter sent to the Ministry of Economy and Finance, the club has requested the observation of the proposal, which could further complicate the situation for other clubs seeking financial relief. However, the National Superintendency of Customs and Tax Administration (Sunat) has taken a different stance. Gerardo López, the superintendent of Sunat, stated that Universitario, for example, has met its current tax obligations since the paralysis of its bankruptcy process. This suggests that, although there are valid concerns regarding tax collection, there are clear examples of clubs that are advancing in meeting their fiscal responsibilities. Universitario de Deportes, which has long struggled with a heavy debt burden, has managed to reduce its current liabilities by more than half since 2021. Jean Ferrari, the club's current administrator, claims that the complete cancellation of all current debt is expected by the end of 2025 if the current pace of payments is maintained. These advancements indicate that, with appropriate regulation, clubs can find efficient solutions to their financial problems. The legislative proposal establishes that clubs must develop a viability plan for the payment of their bankruptcy debts, with deadlines ranging from 10 to 30 years, depending on the amount of debt. Sunat will also play a key role by overseeing these processes and appointing the administrators of the clubs that will adhere to this new framework, thereby ensuring the necessary control and transparency in managing debts. In conclusion, the new bankruptcy framework represents a significant opportunity for crisis-stricken football clubs to restructure their debts and return to a path of financial stability. The ball is now in the court of the Executive, and the decision it makes in the coming days will be crucial in determining the future of these teams and, therefore, of the football industry in the country. Expectations are high, and clubs, along with their fans, hope that decisions will be made that benefit all parties involved.