BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN SPAIN] 98
legal entity or individual that is not included within the concept of "Micro-companies" may file for insolvency proceeding, with the sole exception of entities belonging to the territorial organization of the State, public bodies and entities. From an objective point of view, only one condition will be required: that the debtor is in a "situation of insolvency", understood as the impossibility of regularly complying with its obligations. However, also the debtor may file for insolvency proceeding not only when such default occurs at the time of filing for insolvency proceeding (current insolvency), but also when the debtor foresees that the default will occur within the following three months (imminent insolvency). The insolvency proceeding begins with the filing of a lawsuit for insolvency before the Commercial Court of the province where the debtor has the main centre of management and administration of the company. The lawsuit may be filed by the debtor itself, in which case we will be dealing with voluntary insolvency proceedings, or by the creditors, in which case we will be dealing with necessary insolvency proceedings. The most relevant consequence between the two cases is that, as a general rule, in the case of voluntary insolvency proceedings, the administrative body will be maintained, whereas if insolvency proceedings are filed by the debtor, they will be dismissed and replaced by the Receiver. However, as we
have said, this is not an imperative consequence. Certain legal and financial documents must be attached to the lawsuit, the most relevant of which are as follows: - The so-called "Legal and Economic Report" in which the debtor must justify its insolvency situation; describe the legal and economic background; identify the administrative body and partners; express the causes of the insolvency; and whether or not it considers the insolvency to be viable;
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A "List of Creditors" in which the debtor shall duly identify each of its creditors, contact details available to him and the specific debt owed and its status;
- An "Inventory of assets and rights" of which it is the owner with the identification, location and value attributed to each of them. II.1.2. Declaration of the insolvency proceeding. The insolvency proceeding shall be declared by means of an order issued by the Commercial Court, which shall contain, among others, the following pronouncements: - The appointment of a Receiver to manage the proceeding: - The commencement of the "Common Phase", as well as, in the event that the debtor has
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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