Restructuring and Insolvency Newsletter - January 2021

Spain - 

Commercial judges in Catalonia add to publicity and transparency requirements for transfer of business unit processes

The decision states that insolvency receivers, owners or lawyers must report regarding any companies with operating business units that have given a pre-insolvency notice, are in insolvency proceedings or other difficult situations, remotely on a standard form with the company’s main particulars. This gives them tools for providing information to parties interested in investing in companies in distress and other particularly difficult situations, and to disseminate business opportunities.


Stay of duty to request the opening of insolvency proceedings extended until March 14, 2021, and new measures on renegotiation of arrangements with creditors and refinancing agreements approved

Royal Decree-Law 34/2020, of November 17, 2020, on urgent measures to support the solvency of businesses and support the energy sector, and in the tax field has broadened the stay of the duty to request the opening of insolvency proceedings until March 14, 2021 and amended the time periods for renegotiating arrangements with creditors, refinancing agreements or out-of-court payment agreements.

For further details of the main new legislation see here.


Release of two new ICO guarantee facility tranches amounting to €2,550 million for companies in the process of fulfilling an arrangement with creditors

The decision of November 25, 2020, by the Secretary of State for the Economy and Business Support, published the decision by the council of ministers setting out the terms and conditions for the new tranches of the guarantee facilities approved by Royal Decree-Law 25/2020, of July 3, 2020. The new tranches are to be used for funding to businesses under an arrangement and any which, while not under an arrangement, were in the process of reviewing their promissory note program on MARF (Spanish Alternative Bond Market) on April 23, 2020.


Judgments of interest

  • Silent administrator role allowed in pre-pack sale of business unit
  • Admission for consideration of application for amendment of arrangement with creditors under COVID-19 legislation
  • Purchaser of business unit not liable for prior debts even if its shareholder and sole director is also general manager of insolvent company
  • Interpretation of Recast Insolvency Law in relation to debt relief for public claims
  • Insolvency proceedings must end if debtor has sufficient liquidity to pay all past-due liabilities
  • Reduction of VAT paid on irrecoverable claim should be allowed even if the claim has not been notified in the insolvency proceedings on the debtor
  • Creditor’s disagreement with valuation of its claim in a proposal for a rearrangement does not mean the proposal cannot be admitted for consideration
  • Pre-deductibility of post-insolvency claims in the event of insufficient assets available to creditors
  • Ownership of a single property in another member state does not overturn presumption that the COMI is where debtor has principal residence


News, publications and events

  • 'Global Restructuring Review' includes Garrigues Restructuring and Insolvency practice among the top 100 worldwide
  • Garrigues launches 'Guide to restructuring tools and insolvency proceedings in Spain, Portugal and Latin America'
  • Garrigues reports on main trends in NPL transactions in Latin America, Spain and Portugal
  • Professionals from the Garrigues Restructuring and Insolvency Department participate in events and publications of this field