Insolvency and Restructuring

Long-Awaited Amendment to Insolvency Legislation in Spain: Is it Sufficient?

The Law introduces positive changes to financing agreements and restructuring but fails to address critical issues. Inadequate resources for the Justice system and the absence of solutions for individual debt problems persist. Additionally, the underutilization of the restructuring procedure contributes to low satisfaction among ordinary creditors.

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Modification of the bankruptcy proceedings in Spain

The Council of Ministers has endorsed a draft amending Spain’s insolvency proceedings law, previously modified by Royal Decree 3/2009. The amendments, introduced to expedite and reduce costs, aim to position insolvency proceedings as a tool not only for winding up but also for attempting to save the company.

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Features of the Enforcement of Bank Guarantees in Spain

The strict reading of Article 97.2 may harm a creditor with a debtor-specific guarantee, as it implies automatic extinguishment without additional criteria. Unfortunately, the current wording doesn’t support a discretionary judge interpretation, posing a risk of guarantee extinguishment without due consideration.

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Manager’s Liability within the Framework of Bankruptcy Proceedings in Spain

The recent Spanish Bankruptcy Law expands the examination of company managers’ liability, supplementing existing provisions in the Public Limited Company and Limited Liability Company Laws, as well as the Criminal Code, within the context of corporate crime. It introduces a classification section in bankruptcy proceedings where the judge assesses the involvement of company managers in the company’s bankruptcy situation.

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Impact of company abandonment in Spain on the system of managerial liability

The Spanish legal system offers creditor protections for companies that cease commercial operations but remain inactive, failing to undergo the necessary dissolution and liquidation processes. Typically insolvent, these companies neglect corporate debts and obligations by discontinuing trading, abandoning the business premises, not filing annual accounts with the Commercial Registry, neglecting tax payments, and failing to fulfill other corporate obligations mandated by law.

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