Restructuring & Insolvency Newsletter - March 2019 | Judgments of interest
Ranking of claims payable to the government in respect of refunded subsidies depends on when they were granted
Judgment by the Supreme Court (Chamber One), November 20, 2018
Chronological parameters must be used when classifying claims arising from the obligation to refund subsidies. Accordingly, if the subsidies were granted before the insolvency order, the claim in respect of the refunded subsidy must be a pre-insolvency claim whereas if the subsidy was granted after the insolvency order, the claim for the refund must be a post-insolvency claim.
Labor courts will determine whether a transfer of undertakings exists in insolvency sales of business units
Judgment by the Supreme Court (Chamber Four), November 28, 2018
The jurisdiction to determine whether or not a transfer of undertakings to the transferee exists with respect to salary debts linked to the business unit acquired in an insolvency proceeding lies with the labor courts. In this case, with the decision awarding the independent business unit a transfer took place of an economic entity which retained its identity, since the awardee gained a set of organized means that allowed it to carry on the economic activity that had been conducted previously.
Insolvency judge has jurisdiction to declare that attached goods are necessary for the debtor's activity
Judgment by the Supreme Court (Chamber One), December 18, 2018
The insolvency judge has the jurisdiction to declare that assets attached by the labor court were needed for the debtor to continue trading. Only the insolvency judge is allowed to adopt that decision, by connecting the specific situation of the debtor concerned with the importance that the attached assets have for enabling the debtor to continue trading.
Order homologating a refinancing agreement may be enforced to make a dissenting creditor comply with the agreement's terms
Decision by Barcelona Commercial Court no 9, January 7, 2019
The homologation decision on a refinancing agreement is treated as an enforceable instrument. If debtor or creditor breaches the agreement, its termination may be enforced directly, without first having to initiate an ancillary declaratory proceeding on the breach.
Contingent claims must qualify as financial claims for the purpose of homologating a refinancing agreement
Judgment by Madrid Commercial Court no 2, January 14, 2019
Contingent claims must qualify as financial debt for the purpose of calculating the requisite majorities for the homologation and extension of effects of a refinancing agreement. The existence of an eventual unfair prejudice caused to challenging contingent creditors must be assessed by comparing the treatment given to their claims with respect to other contingent claims and not with respect to claims of a different nature. That been said, should the claims included in the agreement which hold no voting rights be so significant that their refusal of the agreement may lead to the requisite majority legally established not being met, then an eventual challenge may be upheld, leading to the inefficacy or the nullity of the agreement as a whole, and not only to the upholding of the challenge with sole effects for the challenger.
Individual enforcement action may be initiated against a debtor’s assets after an insolvency proceeding on the debtor has ended due to insufficient assets available to creditors
Decision by the Central Economic-Administrative Tribunal, January 30, 2019
After the insolvency proceeding has ended due to insufficient assets available to creditors to pay post-insolvency claims, any creditors holding recognized claims that have not been satisfied in full may initiate individual enforcement actions against any of the debtor’s assets or rights arising in the future, unless it has been agreed to reopen the insolvency proceeding or a new insolvency order is issued (in this latter case, if the debtor is an individual).
Judge for main insolvency proceeding does not have jurisdiction to hear action for damages arising from a wrongful act
Judgment by the Court of Justice of the European Union (CJEU), February 6, 2019
The Luxembourg Court held that a claim for damages arising from an wrongful act contemplated in Netherlands law (Peeters/Gatzen action), and which is brought by the insolvency practitioner in the insolvency proceeding, does not fall within the scope of Regulation 1346/2000 on insolvency proceedings (now replaced by Regulation 2015/848) but within that of Regulation 44/2001 (now replaced by Regulation 1215/2012). For that reason, it concluded that the judge with jurisdiction to hear that type of action is not the judge hearing the Dutch insolvency proceeding.
The Chamber arrived at this conclusion after considering that the action was subject to general rules of civil and commercial law not to specific rules on insolvency proceedings, because the insolvency practitioner is not the only person with standing to bring the claim, in addition to which the claim is independent from the insolvency proceedings and therefore cannot be considered a direct and inherent result of those proceedings.