More than just restructuring plans
Commentaries on the Spanish Insolvency Law Reform
It is well known by now that Law 16/2022 of 5 September, amending the consolidated version of the Insolvency Law, was published in the Spanish Official Gazette (Boletín Oficial del Estado) on 6 September.
As we already discussed here, the reform transposes the EU Restructuring Directive and introduces a new legal framework for restructuring in Spain with the implementation of the so called restructuring plans.
However, the reform does not stop at restructuring plans and other pre-insolvency instruments, such as the communication of the opening of negotiations with creditors. It also incorporates a new special procedure (exclusively) for micro-enterprises, which quantitatively speaking make up most of Spain’s business fabric. This amendment is so important that its entry into force has been postponed to 1 January 2023.
Moreover, leaving aside those changes regarding pre-insolvency law and the special procedure for micro-enterprises, the reform also makes key modifications to the different phases of insolvency proceedings to the extent that someone could go as far as to say that the structure of these proceedings has significantly changed.
Where these modifications may be seen? By way of example, in the regulation of claw-back claims (the two-year period will start with the request for insolvency or the pre-insolvency communication, not the declaration); in the composition agreement (removal of early composition agreement proposals and creditors’ meetings); in the liquidation phase (removal of liquidation plans and introduction of general rules on liquidation with significant court intervention); in the classification phase (there will always be classification, without exception, Public Prosecutors will no longer have a role at this stage and creditors will have more involvement; on the other hand, the possibility to conclude settlement agreements on the economic consequences of the classification is expressly recognised); in the conclusion of the insolvency proceedings and discharge of non-paid debt (continuation plans without liquidation become preferential) and even in the procedural aspects of the proceedings themselves (commercial courts will once again have jurisdiction to hear natural persons’ insolvency cases and the complex regime of deferred appeals is removed).
There are many more changes which for obvious reasons we cannot cover now. Because of this, at Uría Menéndez we thought it would be interesting to share some commentaries on details about the reform. We will therefore continue to publish these commentaries on all the main issues, in the same order in which they appear in the current version of the Insolvency Law.
Our next commentary will reflect on the repercussions of the period between the end of the insolvency moratorium measures in late June and the entry into force of the insolvency reform, which will also be available on our website and LinkedIn profile.
We encourage all of our followers to read, share, comment on, and even add to our contributions or suggest other topics for us to cover.