One of the advantages of the pre-insolvency proceedings is that it stops the execution of judicial enforcement of properties and rights so that the company can continue with its professional activity.
The crisis may drive companies into insolvency. In these cases, the management body must adopt the fairest solution for all creditors, with the purpose to resolve the critical situation of the company. Pre-insolvency may be an alternative.
On March 8, 2014, Spain introduced Royal Decree-law 4/2014, known as the New Reform, to enhance the Spanish Insolvency Law. Acknowledging the inflexibility in pre-insolvency and insolvency systems, the reform aims to boost refinancing discussions. It achieves this by establishing a more secure pre-insolvency environment, safeguarding the debtor’s key assets against enforcement by unsecured creditors.
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