Restructuring and Insolvency Newsletter - March 2023

Spain: Extension of the accounting moratorium, modification of the insolvency regime for the recovery of public guarantees and other regulatory developments in the insolvency field

Royal Decree-Law 20/2022 has extended the "moratorium on dissolution" until the close of the financial year 2024 and has modified the regime for the recovery of public guarantees in insolvency situations; the General State Budget Law for 2023 has reformed the regime for tax deferrals and instalments in pre-bankruptcy situations; and Order JUS/1333/2022 has established the electronic forms for the special procedure for micro-companies and the technical specifications for the electronic platform for the liquidation of assets.

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News

• The commercial judges of Madrid publish a guide for the appointment of an expert on insolvency pre-pack
• Andalucía commercial judges reach a decision on special liquidation rules
• Seville commercial judges reach decisions regarding no-asset insolvency proceedings, the pre-pack insolvency proceeding and indispensable claims for liquidation
• The European Commission submits a Proposal for a Directive to harmonize certain aspects of insolvency law across the EU

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Judgments of special interest

• Public disclosure not required of appointment of expert in restructuring in the context of a pre-insolvency notice
• Netting of post-insolvency claims in cases where insufficient assets available to creditors has been notified is limited
• Insolvency-related grounds cannot be pleaded to render void a refinancing agreement on the basis of general civil legislation
• Substantiation of fault-based classification on the basis of a tax penalty imposed on the debtor for fraudulent conduct
• Subordination of claim acquired from a specially-related party unless acquirer proves they did not know or could not have known about that fact
• Pre-insolvency notice may head off directors’ liability for losses
• Challenging an inventory is not the right procedure to correct insufficient or incomplete description of a business unit
• Insolvent company under suspension does not have standing to bring proceedings with a possession content
• Registration of transfer of an administrative concession in the context of an insolvency proceeding requires authorization to be obtained from the public authority where that authorization is mandatory
• Fault-based classification due to early repayment before their due dates of loans to specially-related parties
• Classification as claim in litigation requires existence of a “clear and honest dispute” over the existence of that claim
• Transfer of lease agreement forming part of a business unit does not prevent a rent increase
• Distinction between start date of time period for clawback action in insolvency proceedings and under civil law in relation to a mortgage
• Commencement of liquidation phase makes it unnecessary to request termination of administrative contracts

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Events and publications in which Garrigues participates

Publications

• “The pre-pack in the Proposal for a Directive of December 7, 2022”
• “New Legal Framework for Company Restructuring in Spain”
• “Corporate Law, Insolvency Law and the Law on Financial Markets”
• “INSOL Europe/LexisPSL joint project on the implementation analysis of the Directive (EU) 2019/1023 in the EU Member States: Spain”
• “Non-Performing Loans: the Registration Obstacle Race in Spain for Loan Buyers and Managers”
• “The New Restructuring Plans: Can Creditors Replace Shareholders in Companies’ Capital?”
• “Fourth edition of the Insolvency Law Manual”

Awards and accolades

• Chambers recognises Garrigues as Tier 1 in the Insolvency practice area
• Several lawyers in the Garrigues Restructuring and Insolvency Department recognised as Best Lawyers in the “Insolvency and Reorganization Law” category
• Juan Verdugo receives “Client Choice Award 2022” for Restructuring & Insolvency

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