Portugal: Court of Santarém declares insolvency of VF1883

VF1883 Pharmaceuticals, a company producing medicinal cannabis based in Benavente, was declared insolvent by the Court of Santarém. The insolvency decision, requested by one of the company's more than 80 creditors, was handed down on November 23, 2022 and has now become final in January 2023. According to exclusive information available to Cannareporter, the management da VF1883 will have until March to present an insolvency plan. 

VF1883 Pharmaceuticals had already disappeared from the listing of companies licensed by Infarmed to produce cannabis in 2022. The start of this insolvency process, along with the impossibility of carrying out the planned activities, show signs of some difficulties in the company, which is now under the watchful eye of creditors.

The judicial decision, which took place on November 23, 2022 and became final in January 2023, after the judicial holidays, was handed down by Judge Carla Santos Ribeiro. According to the data contained in the queries from the Citius platform, the judge upheld the grounds of the applicant, the company Fluxoterm – Climatização, Lda., an air conditioning company based in the vicinity of Leiria. With the judgment of declaration of insolvency, an assembly of creditors was constituted and an insolvency administrator was appointed.

VF1883 has more than 80 creditors

In November, at the time of the court's decision, Manuel Reinaldo Mâncio da Costa was appointed as Insolvency Administrator and the date was also set for the meeting of creditors, which took place on the 19th of January, and brought together the companies that claimed payments missing from the company. The insolvency process, then opened, brings together more than 80 creditors, according to data published on the same portal of the Ministry of Justice.

In the list consulted by CannaReporter, there are both individuals and companies and even entities such as Social Security and Tax Authority. These will be the ones who will compose the meeting of creditors, together with representatives of the company's employees. CannaReporter does not know whether the Social Security Wage Guarantee Fund mechanism has been activated.

Creditors' meeting took place on January 19

The VF1883 Creditors' Meeting took place on the 19th of January, with the aim of deciding the future of the company and analyzing the report prepared by the insolvency administrator. According to exclusive information, the meeting of creditors waived the need to liquidate the company. This meeting allegedly resulted in a concession by the creditors to the management of VF1883, giving it the opportunity to present an insolvency plan.

The company will thus be able to continue to develop its activities, having to present to the creditors' meeting a plan regarding the restructuring of its activities and respective costs. The plan, which will be decided on by the creditors' meeting, will have to be presented by management within two months. In March, creditors will review the insolvency plan and decide on the future of VF1883.

The company's project, announced in 2019, provided for the creation of 250 direct jobs and, at the end of implementation, more than 600 jobs. However, in 2021 the mayor of the municipality of Benavente, who gave a prior favorable opinion for the installation of 0 drying pavilions, six greenhouses and several support buildings, stated in 2021 to Jornal O Mirante that the employment generated was, after all, “very residual”.