Restructuring & Insolvency
In a pioneering guide, Garrigues analyzes the appeal of the Spanish distress market and the tools needed to close financing, asset, share and debt deals.
Garrigues received the FT European award for legal innovation in London last night, for creating a new way to help international investors recover non-performing loans (NPL) from financial institutions. The newspaper took into account the huge impact of this legal innovation, which creates a new standard and improves competition and the appeal of the Spanish NPL market, one of the most active in Europe. This new approach, conceived by Garrigues’ Restructuring and Insolvency Department, allows funds to rapidly foreclose, auction and award the assets, saving a great deal of time and money.
On July 2, 2019, the Supreme Court delivered a landmark judgment dealing with the requirements to be met to secure the discharge of debts through the so-called ‘fresh start’ mechanism. Under Spanish law, ‘fresh start’ refers to the situation where a debtor is relieved of paying outstanding debt. It is a tool that may be used by individuals (traders, freelancers and heavily indebted consumers) to shed their debts, which will be released, enabling them to undertake new ventures.
We look at the differences and advantages of the Spanish and UK systems, pinpointing the more favorable elements of the Spanish system, designed to give greater security and certainty to the investor.
Final provision number three of the Trade Secrets Law, in force since March 13, 2019, authorized the government to approve a revised wording of the Insolvency Law within eight months. Under that authorization, on March 22 the Ministries of Justice and of Economy and Enterprise submitted a bill for the Revised Insolvency Law.
On June 6 the Council of the European Union approved the Proposal for a Directive of the European Parliament and of the Council on preventive restructuring frameworks, second chance and measures to increase the efficiency of restructuring, insolvency and discharge procedures.
A judgment of the Court of Justice of the European Union (ECJ) confirms the possibility of replacing an unfair early termination clause in a loan agreement by the application of article 693.2 of the Spanish Civil Procedure Rules (LEC), declaring valid and not unfair to start mortgage foreclosure in the event of default of at least three monthly instalments.