Colombia continued from page 19 Key Cases
GACSAS 9
The insolvent settlor instructed the trustee to file insolvency petitions for two I. T. structured under an asset and obligational isolation scheme and not engaged in business activities. The trust agreements neither contemplated insolvency proceedings nor authorized the settlor to issue such instructions. Creditors opposed the filings, arguing that the trusts merely collected and distributed funds. Nevertheless, the judge found that business activity existed based on a registration made for opposability purposes before the Chamber of Commerce of the settlor’ s domicile.
GMÓVIL 10
Similarly, the insolvent settlor instructed the trustee to file an insolvency petition for the I. T. without contractual authorization. Creditors did not challenge the court’ s decision to open the proceedings.
AZTECA 11
The settlors requested that insolvency proceedings be opened ex officio for two I. T. in parallel with their own reorganization proceedings. The trustee objected, noting that the trusts did not conduct business activities and merely
40 administered cash flows for creditor payment. The judge nonetheless ordered the ex officio commencement of insolvency proceedings, citing the existence of operational, economic, and financial unity between the settlors and the trusts, and holding that contractual provisions were not determinative. Appeals by creditors and the trustee were dismissed. Impact on Bankruptcy Remoteness Notwithstanding the admission of these
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Orders Nos. 2023-01-499527 and 2023-01-499511 dated June 2, 2023, Independent Trusts ERNESTO CORTIZZOS and CREDITORS, Superintendence of Companies.
10
Order No. 2025-01-146051 dated April 3, 2025, Superintendence of Companies.
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Order No. 2025-01-687025 dated September 25, 2025, Superintendence of Companies. trusts into insolvency proceedings, none of the decisions has resulted in the invalidation of security interests or in the forced redirection of trust cash flows to the settlor’ s insolvency estate in contravention of Article 43( 5) of Law 1116 of 2006 12.
The legal tension therefore does not concern the validity or enforceability of security interests, but rather the expansion of the subjective scope of insolvency law to encompass Independent Trusts that were contractually and structurally designed as insolvency-remote vehicles and that do not conduct business activities.
As a result, such trusts currently offer a diminished degree of bankruptcy remoteness vis-à-vis the insolvency risk of the originator, relative to prior market assumptions and established structuring practices. Conclusions Although the three cases involving these five trusts represent less than 0.1 % of all insolvency proceedings, they establish a significant legal precedent for the financial and project finance markets.
While there is no indication of a direct assault on the enforceability of security interests, there is a discernible shift in judicial interpretation regarding the subjective and obligational autonomy of Independent Trusts that lack business activity.
Although reliance on patrimonial and obligational segregation through commercial trust structures remains legally viable, it is now
continued on page 41
12
In fact, this criterion has remained consistent even in cases where the debtor-settlor filed for insolvency and petitioned the court to make the trust ' s resources available for its own reorganization: Auto No. 2025-01- 267489( April 28, 2025), concerning the single-purpose company Sociedad de Objeto Único Este Es Mi Bus S. A. S., and Auto No. 2025-01-867159( December 24, 2025), regarding Azteca Comunicaciones Colombia. In both cases, the petition was denied, as the court formally recognized the principle of asset and liability isolation.
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