Changes in the Bankruptcy Law in Spain

Among the most important aspects amending Royal Decree-Act 4/2014, which must be ratified by Congress, is the new regime on judicially approved refinancing agreements, which may include waivers and capitalisation of debt, in addition to deferral payments.

These agreements will be able to extend their effects to opposing creditors when the majority of creditors established in each case accept the agreement. These are the principal changes that from now will make the heavy burden of debt more manageable for more businesses.

The law introduces the possibility of reaching a refinancing agreement with one or more creditors, without the need of the approval of all the creditors, as long as the agreement improves the financial position of the debtor. Only a judge can cancel these agreements, at the request of the bankruptcy administration, if the judge decides that the agreements do not meet the requirements.

This article is not considered as legal advice

Mariscal & Abogados specialises in providing legal counsel and assistance to both creditors and debtors on insolvency and bankruptcy proceedings in Spain. If you have a query, do not hesitate to Contact us.