Updates Restructuring and Insolvency Work 5-2013
REFORM OF THE SPANISH INSOLVENCY LAW BY LAW 14/2013, TO SUPPORT ENTREPRENEURS AND THEIR INTERNATIONALIZATION
In September 28 the Official State Gazette published Law 14/2013 to support entrepreneurs and their internationalization (the “Entrepreneurs Law”). This new law has been enacted to bring in reforms that will encourage growth and business activity, and it has amended numerous elements of the Spanish Insolvency Law, especially in relation preinsolvency matters and in three key components:
- Amendment to the Formal Refinancing Agreements legislated in additional provision four (better known as the “Spanish scheme”). A more flexible rule has been included on the computation of the majority of liabilities that sign up to the scheme, for the purpose of extending the deferral stipulated by the majority to the nonparticipating or dissident entities.
- More complete rules on the procedure for appointing an independent expert responsible for issuing the report on the debtor’s viability and the proportionality of the guarantees.
- Allowing schemes outside the insolvency proceeding between certain types of debtors and their creditors, under a scheme called an “out of court payments agreement” overseen by a person in the new role of insolvency mediator.
In addition, the so-called “fresh start” has made its first appearance in Spanish law whereby a debtor who is an individual can, within an insolvency proceeding, cancel once and for all any debts that could not be satisfied with their property and assets that are present. The scope of this fresh start is restricted, however, because it will only be available to certain types of debtors; it does not apply for public law claims and requires the debtor to satisfy certain classes of claims in full (preferred claims especially, which include those secured by a mortgage or pledge).
1.1 New percentage for authorization of Formal Refinancing Agreements
1.2 Independent expert appointment procedure
1.3 New out of court payments agreement: the insolvency mediator