The Process and Requirements of the Bankruptcy Mediator in Spain
On December 13, 2013, the Spanish Council of Ministers adopted the Royal Decree on the Development of the Determined Aspects of Law 5/2012, of July 6, 2012, on Mediation in Civil and Commercial Matters (the “Regulation”). Among other things, the Regulation develops the training requirements for access to the Civil and Commercial Mediator Registry as well as the Bankruptcy Mediator Registry in Spain.
In Spain, the Law of Entrepreneurs established that a Bankruptcy Mediator must meet two required conditions: (1) be a Bankruptcy Administrator (following Article 27 of the Spanish Bankruptcy Act) and (2) a Mediator (as required by Law 5/2012, of July 6, on Mediation in Civil and Commercial Matters — the “Mediation Act,” which was being developed).
Now that the Spanish Government has approved the Regulation that develops the Mediation Act in Spain in those aspects, the Bankruptcy Mediator Registry requires development by next April 1. April 1 is the start date for registry in the Bankruptcy Mediator Registry.
Article 233 of the Spanish Bankruptcy Act establishes as a requirement two conditions to become a bankruptcy mediator: (1) training in Mediation and (2) fulfilment of the requirements of Article 27 of the Act to become a Bankruptcy Administrator (see point (c)(ii) below). Until December 13, only the requirements to be a Mediator, as set out in the Regulation, were missing.
The essential process of bankruptcy mediation and the requirements of a bankruptcy mediator include the following:
- The request of settlement agreements: a debtor who intends to reach an agreement with his or her creditors will ask for the appointment of a bankruptcy mediator. If the debtor is a judicial person, this judicial person must be competent to decide on the application of the administrative body or liquidator.
- The appointment of a bankruptcy mediator: this function shall lie with a natural or legal person named on the official list of the Spanish Official Bulletin (“BOE”), which the Register of Mediators and Mediation Institutions of the Spanish Ministry of Justice will provide. The bankruptcy mediators will receive compensation according to the salary of bankruptcy administrators.
The appointment of mediators will take place in sequential order from among those registered in the province registry, which lists the admitted notaries and registrants by their corresponding digital certificate. If no registry exists in the province, it will go to the boarding provinces, Autonomous Community, and the Spanish State — in this order.
If the designated bankruptcy mediator does not accept the position, it will pass to the subsequent mediator. The bankruptcy mediator will be placed at the end of the list and will not be appointed until his or her turn comes again.
Similarly, the Bankruptcy Mediator must have liability insurance, which must have the same coverage as that of a bankruptcy administrator as regulated in the Royal Decree 1333/2012, of September 21, 2012. Therefore, it must be requested from the Insurance Company that the coverage policy include the activity of the Bankruptcy Mediator. The mediating party must become aware of this insurance policy at the start of the activity.
Following the third final provision, the registration period will begin on April 1, 2014, and the start of the publication of the Registry will begin on June 1, 2014.
a) Conditions for Appointment
- The appointed bankruptcy mediator must fulfil the requirements in the Spanish Mediation Act: possess an official university degree or a superior professional qualification and have specific training to practice mediation.
- Additionally, the appointed bankruptcy mediator must meet the subjective conditions of Article 27.1 of the Bankruptcy Act for the appointment of bankruptcy administrators. For example, the appointed bankruptcy mediator must (a) be a practicing attorney with five years of professional experience in the actual practice of law with accredited specialized training in bankruptcy law, or (b) be an economist, commercial graduate, or auditor with five years of professional experience and demonstrable specialization in bankruptcy. A legal person may also become an appointed bankruptcy mediator, integrated with at least a practicing attorney and an economist, commercial graduate, or auditor, to guarantee the independence and dedication to the development of the functions of the administration of bankruptcy.
Within 10 days of accepting the position, the bankruptcy mediator must verify the existence and amount of loans. Within two months of accepting the position, the bankruptcy mediator must call the debtor and the creditors to a meeting held in the debtor’s domicile.
This article is not considered as legal advice