[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN SPAIN] 89
The determination of whether or not the asset or right subject to execution is necessary for the continuity of the debtor's activity is the exclusive competence of the insolvency judge, and only once such declaration of unnecessary nature has been obtained may the execution continue, and only with respect to the three types of credits indicated in the preceding paragraph. For the rest of the credits, the impossibility to initiate executions is absolute. Having said this, the declaration of insolvency of the principal debtor does not prevent the initiation of claims/enforcement against third party guarantors. II.2. Processing of the insolvency proceeding. As mentioned in the introduction, the procedure is structured and developed in three phases, the Common Phase, the Agreement Phase, and the Liquidation Phase Without prejudice to the foregoing, for organisational purposes of the procedure, it should be noted that the insolvency proceeding is divided into six sections within which all the procedures are integrated. Thus, the proceedings pertaining to the common phase are included in Sections 1, 3 and 4, and those relating to the Agreement Phase and Liquidation Phase in Section 5. Having established the above, in the following points we will first analyze the most relevant aspects of each of the three phases, as it is through them that the bulk of the procedure is carried out, referring finally to section 6, known as "Qualification Section", as this is a very relevant aspect of the procedure whose regulation is outside the three phases mentioned above. II.2.1. Common Phase: This is the first phase of the insolvency proceeding and its essential
objective is to determine the debtor's situation, for which the Receiver must draw up a report containing the following elements: - An analysis of the "Legal and Economic Report" submitted by the debtor with the lawsuit asking for its insolvency proceeding; - A statement of the state of the debtor's accounts; - An explanation of the main decisions and actions taken by the Receiver itself. - A reasoned statement of the debtor's assets and any other elements that may be relevant to the proceedings. The report must also be accompanied by an Inventory and a List of Creditors drawn up by the Receiver itself. The List of Creditors will include a classification of the creditors' claims according to their characteristics, which will determine their collection preference and their rights within the Agreement or Liquidation Phase. Finally, in the case of a company, a valuation must be provided for the company as a whole and for each of the production units that make up the company, both in the hypothesis of continuity of activity and in liquidation. Once the report has been issued by the Receiver, the creditors and the debtor himself may object to both the Inventory and the List of Creditors if they do not agree with what is reflected in either of these documents. In the event that no objections are filed or once those filed have been resolved, the Receiver will make the Inventory and the List of Creditors definitive, which may no longer be subject to variations.
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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