Restructuring and Insolvency Newsletter - July 2024

Spain - 15 / 07 / 2024

News update

Judges of Barcelona unify principles on certain points of insolvency law
Changes on the Spanish Insolvency Law on arrangements with creditors and restructuring plans regarding structural modifications
The Ministry of Economy, Commerce and Business publishes the draft law on credit administrators and buyers to transpose the European Directive that promotes the development of NPLs
The term for granting guarantees by the Official Credit Institute (ICO) is extended and the conditions of sections I, II and III are modified

International case law

European jurisprudence on universal and territorial procedures (AIR BERLIN matter)

Restructuring plans

Court confirmation of a restructuring plan proposed by creditors and evicting the existing shareholders (CELSA matter)
Court confirmation of a non-consensual restructuring not based on a majority of classes but on enterprise valuation (NAVIERA ARMAS matter)
Restriction to early termination of contracts due to a change of control derived from a Court-confirmed restructuring plan (FANDICOSTA matter)
Combined court confirmation of various individual restructuring plans (EZENTIS matter)
Joint appointment of restructuring expert for Spanish and foreign companies of the same group (TELEPIZZA matter)
It is not necessary to value guarantees in plans that have unanimous support of affected creditors (DENEF matter)
Denial of Court-validation of a joint restructuring plan due to non-compliance by one of the requesting debtors
Financial claims with and without an ICO guarantee can form separate classes of creditors
Possibility of obtaining court confirmation of individual restructuring plans of foreign companies with a Spanish parent
Competing restructuring plans must be handled in a time-based priority order

Bankruptcy proceedings

Shareholders be liable for outstanding tax debt in the event of the bankruptcy being concluded due to insufficient assets
An arrangement with creditors cannot alter priority in the order of payment of claims, nor impose obligations on creditors who are not parties to the proposal with respect to other proceedings
The initial assessment of an insolvency proceeding as a no-asset bankruptcy does not prevent a potential subsequent declaration of a full-fledged insolvency proceeding
Termination of contracts in the interests of insolvency proceedings is incompatible with regular grounds for termination of contract under civil law
Nonpayment of one past-due claim is a sufficient ground for applying for declaration of a breach of the arrangement with creditors

Publications

‘Commentary of the Insolvency Law, 3rd edition’
‘Joint processing of competing restructuring plans’
‘How to Obtain Recognition of a Foreign Insolvency Process and How to Enforce Insolvency-Related Judgments (Spain)’
‘Risks for Transactions and Directors in Financially Distressed Businesses (Spain)’
‘International transfers of claims: present and future challenges’
‘Equity wipe-out in the new regulation of restructuring plans in Spain’
‘About Celsa, Celsus and the brand new restructurings’

Awards and accolades

Andrés Gutiérrez Gilsanz obtains Chair in Corporate/Commercial Law (Cátedra de Derecho Mercantil) at Universidad Rey Juan Carlos
Chambers ranks Garrigues Band 1 in the areas of Restructuring and Insolvency 2024
IFLR 1000 2024 ranks Garrigues Band 1 in the area of Restructuring and Insolvency
Legal 500 (EMEA 2024) ranks Garrigues Band 1 in the area of Restructuring and Insolvency, and recognizes several partners in such practice area