BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN SPAIN] 102
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During the same period, no execution may be initiated or continued on the assets and rights necessary for the continuity of the debtor's activity.
that many Spanish companies have resorted to this method of debt refinancing/restructuring as it is a much quicker process than insolvency proceedings, which, like any judicial procedure, require certain formalities and, above all, much longer deadlines, with the disadvantages that this entails for a company in difficulties. Likewise, the configuration of restructuring plans through the conformation of classes of credits based on broad and flexible classification criteria, although always based on objective and justified criteria, is allowing companies room for maneuver to configure these classes of credits in such a way that they can manage to approve restructuring plans and carry forward dissenting liabilities with small percentages of adhered liabilities. Thus, restructuring plans have been approved with extension of effects to all affected liabilities with adhesion percentages of less than 10% of total liabilities. Although these are restructuring plans approved in the first instance, and judgments are pending to be handed down resolving the appeals filed in many cases, the truth is that beyond the fact that some abuses may be corrected as artificial configuration of classes by the debtor, it seems that the case law will confirm the criteria applied by the commercial courts, since there is not much room for interpretation of the wording of the rule and it is quite clear that the intended purpose of saving companies with high indebtedness, but which are economically viable and profitable, is being achieved.
If such an agreement is not reached, the debtor must file for insolvency proceedings within the following month. Focusing on the Restructuring Plan, its essential notes are the following: - Its purpose is to modify the composition of the debtor's assets and liabilities or equity; - It contemplates the possibility of appointing a restructuring expert; - Extends its affectations to creditors who do not vote in favor of the plan; - It may affect any type of credit, although with special provisions with respect to public law and secured claims; - The credits will be grouped by classes according to their insolvency rank and specific characteristics; - The Plan will be considered approved if more than two thirds of the credits corresponding to each class of credits vote in favor of the Plan; The Plan must be judicially approved if it is intended to extend its effects to creditors who have not voted in its favor; if it is intended to terminate contracts in the interest of restructuring; or if it is intended to protect any transaction carried out under the Plan (financing granted, etc.) from possible rescission. During the two years that Law 16/2022 has been in force, introducing restructuring plans, it is worth noting
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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