BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN SPAIN] 104
IV. SPECIAL
PROCEDURE
FOR
MICRO-
characterized by the streamlining of procedures by providing for appearances to be made by telematic presence (hearings, appearances, declarations) and acts of communication by electronic means and using forms. However, as a counterbalance to this streamlining of formalities, the submission of seriously inaccurate information or documentation is considered as a cause of guilty insolvency. As with the general procedure, the Micro- company procedure may or may not be preceded by a negotiation period to try to reach an agreement with your creditors. This period will have a maximum and non- extendable duration of three months after which, without having reached an agreement, the insolvency proceeding must be filed provided that you are in actual insolvency (not if it is imminent or probable). The main effects of the negotiation period are the suspension of judicial or extrajudicial executions of the assets and rights necessary to continue the activity, except with respect to public creditors, and the impossibility for creditors to file for insolvency proceeding. The special procedure for microenterprises can be processed in two ways: a) As a continuation procedure, for which it will be necessary to approve a Continuation Plan that must be approved by the creditors, which must be homologated in order to affect public law claims, with certain exceptions. In addition, with the application for the Continuation Plan, it is possible to request, among other measures, the suspension of the foreclosure of credits with real or public guarantee on the assets or rights necessary to continue the activity for a maximum period of three months.
COMPANIES. This is the first time that a specific and exclusive regulation for a certain type of company, the so-called micro-companies, has been introduced in the insolvency regulations. The reason for contemplating this special regulation now is twofold, on the one hand, because most companies that go into insolvency proceedings end up in liquidation, and on the other hand, because the Spanish productive composition is made up of a high percentage of companies that meet the parameters of Micro-companies, which makes it necessary to give them a specific treatment with respect to the rest of the insolvency proceedings in order to reduce the costs of the procedure and its duration in view of the smaller size and complexity of these companies. The aim is that if a company is viable, the agreement can be approved as soon as possible, and if it is not, it can be liquidated as soon as possible. Having said the above, the defining parameters of a micro-companies are to have less than 10 employees and a turnover of less than Eur. 700,000 euros or liabilities of less than Eur. 350,000, all according to the annual accounts corresponding to the last fiscal year. Entering the procedure, any company or individual that meets the parameters indicated in the previous paragraph and is in current, imminent (three months) or probable insolvency (forecast of up to two years) may request the insolvency proceeding, which will be processed through this special procedure. As mentioned above, this procedure is
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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