Creditors with at least 5% of liabilities can request a judge to appoint an insolvency administrator for a report in case of insolvency without assets. Note that the requesting creditors will cover the administrator’s fees.
The Government of Spain has extended the bankruptcy moratorium for the third time until 30th June 2022. Insolvency debtors will not have a legal obligation to file for bankruptcy until the middle of next year.
Spain provides companies with a range of economic, labour, contractual, corporate, procedural and fiscal measures. The Covid-19 legislation complements them with new economic and procedural measures to prevent corporate insolvency.
We analyze the numerous judgements of the High Court regarding the existence or not of transfer of undertaking when a company acquires a productive unit of another company in the liquidation phase of the insolvency proceedings.
The legal framework for restructuring and insolvency proceedings governs the reorganization of debt. An insolvency proceeding is an in-court-restructuring procedure that consists of obtaining an insolvency order from a judge. An out-of-court restructuring is where a debtor negotiates directly with its creditors.
By the introduction of a new law, the Spanish legal framework on restructuring and insolvency proceedings is more adjustable to a debtor facing bankruptcy. Still, the difficulty of implementing a complete legal framework lies in covering all possible situations of insolvency.
The current Spanish Insolvency Law raises directors’ liability levels. Hence, directors must not only manage the company but also address legal aspects to prevent liability in insolvency proceedings.
This article delves into crucial aspects of insolvency and debt collection proceedings in Spain. It highlights the practical challenges faced by economic actors, emphasizing the decision-making process between liquidation and reaching agreements with creditors, which can be influenced by the type of creditor involved. The article also briefly touches on the limited effectiveness of insolvency proceedings in family debt cases.
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