1.

Juan Carlos, the president of Tuplastibog, is facing a critical decision regarding the future
of the company.
Answer:
Current status of Tuplastibog: Tuplastibog, a plastic bottle and container company founded by
Juan Carlos and his wife in 2014, is facing serious financial difficulties. In the early years of the
company, there were losses due to operations such as machinery. These losses significantly
reduced equity and put the company at risk of liquidation. Accumulated losses are almost COP
800 million due to Tuplastibog's debt, especially by the end of 2018.

Reasons for the risk of loss of property and liquidation:

 Operational Challenges: Tuplastibog faced significant operational challenges such as
machinery downtime and small orders, which led to high production costs and
operational losses.
 Low Capacity Utilization: Tuplastibog used a small portion of its production capacity
(15-35% during the year), resulting in inefficient use of resources and inability to cover
fixed costs.
 Finance Lease Issues: Tuplastibog's financial statements and debt obligations will be
affected if the lease is considered a finance lease rather than an operating lease.
 Accumulated Losses: The company's accumulated losses over the years have destroyed
its assets and put it at risk of liquidation under Colombian Commercial Law.

2. Viability of Debt Capitalization by the Family:

Advantages:
 Financial stability: Debt capitalization reduces short-term liabilities and improves
liquidity.
 Family Support: The family may be willing to invest further to save the business, given
their history of supporting Juan Carlos and the company.
 Future returns: If Tuplastibog's prospects improve, the family can sell the shares to reap
future returns on their investment.
Disadvantages:
 Financial risk: Debt capitalization involves additional financial risk.
 Lack of experience: The family has little experience in the plastic industry.
 Opportunity cost: Further investment in Tuplastibog may divert resources from other
projects that may be more beneficial to the family.
In conclusion, capitalizing on family debt may provide short-term relief and support for
Tuplastibog, but a careful assessment of the long-term viability and risks associated with the
decision is imperative. Juan Carlos must present a convincing proposal to resolve these issues in
order to obtain family support for debt capitalization.