BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN SPAIN] 99
requested it in the lawsuit for insolvency proceedings, the simultaneous commencement of the "Liquidation Phase"
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 procedure 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;
- An appeal to creditors to communicate their credits. II.1.3. Effects of the insolvency proceeding. The main effects of the declaration of the insolvency are produced by legal imperative, and are the following: - The paralysis of any judicial or extrajudicial execution against the debtor's assets, except for labor executions, public law credits and secured credits, provided that they are directed against assets or rights that are not necessary for the continuity of the debtor's activity and; - The suspension of the accrual of any kind of interest, except ordinary interest on mortgage loans and up to the amount of the guarantee 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
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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