Foreign parent companies are generally protected by the separate legal personality of their Spanish subsidiaries. However, Spanish insolvency law may expose the parent company to liability where it controls management, abuses the corporate structure or mishandles intra-group financing.
The liquidation of real estate assets in insolvency proceedings is the process by which the debtor’s real property is sold to satisfy creditors, in accordance with an orderly plan and under judicial supervision.
Real estate assets play a pivotal role in Spanish insolvency proceedings. Their valuation, legal treatment, and strategic use have a direct impact on creditor recovery and the viability of restructuring. Understanding their regime is essential for investors and companies facing financial distress in Spain.
Pre-pack insolvency has emerged as an increasingly relevant tool in corporate restructuring and insolvency scenarios. This mechanism allows the advance preparation of a business or the sale of productive units prior to the formal commencement of insolvency proceedings, with the aim of preserving enterprise value and accelerating execution.
Client or supplier insolvency is an increasingly common risk in Spain and can seriously affect business continuity. This guide outlines early warning signs, legal remedies and preventive measures to protect companies facing insolvency scenarios.
When dissolving a company in Spain, shareholders may choose to receive assets instead of cash through an in-kind liquidation share. This legal mechanism, regulated by the Spanish Companies Act, offers a flexible and tax-efficient way to close a business while preserving valuable assets. Discover its key legal requirements, main advantages, and the precautions to take for a smooth and equitable dissolution process.
A company faces legal grounds for dissolution in Spain when its net assets fall below half of its share capital. Fortunately, the Spanish Companies Act provides several legal mechanisms to restore financial balance and avoid liquidation, allowing businesses to continue operating.
The communication of the opening of negotiations with creditors is a pre-insolvency mechanism that begins with a written submission to the Commercial Court. It does not require prior approval and immediately triggers the suspension of enforcement actions. Its duration is three months, extendable by up to an additional three months.
The communication of the opening of negotiations allows the debtor to gain time to reach a restructuring plan with its creditors, avoiding the need to file for insolvency proceedings. For three months, the obligation to file for insolvency proceedings and to dissolve the company due to losses is inactive.
The assignment of credits is a valid and widely used legal mechanism in Spain through which a creditor (assignor) transfers to a third party (assignee) a credit right it holds against a specific debtor (assigned debtor).
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