The text transposes a European directive on frameworks for preventive restructuring, debt relief and disqualifications and now sends it to the Senate.
The Law to reform the revised text of the Bankruptcy Law has been definitively approved by the Plenary Session of Congress, with the rejection of all the amendments included in the Senate, so the initiative is now ready for publication in the Official State Gazette and its entry into force.
In the extraordinary session this Thursday, the Plenary Session of the Lower House has ruled on the amendments of the Senate, which has shown its opposition to all of them. Among them, section 1 of article 37 quater was modified to replace the figure of the “bankruptcy administrator” with that of the “bankruptcy mediator” as responsible for issuing the report referred to in article 37 ter and suppress the requirement that this The report must be requested by the creditor or creditors that represent at least five percent of the mass of the liability. Likewise, the third transitory provision dedicated to the transitory regime for the appointment of the insolvency administrator in the special procedure for micro-enterprises was suppressed.
This initiative transposes Directive 2019/1023 into Spanish law to address a “set of limitations” of the current bankruptcy legislation through “a far-reaching structural reform of the insolvency system”. It also seeks to “ensure the continuity of companies and businesses that are viable but that are in financial difficulties that may threaten solvency and lead to the consequent insolvency.”
In the first place, the law establishes “restructuring plans”: “a pre-bankruptcy instrument aimed at avoiding insolvency, or overcoming it, which enables action in a stage of difficulties prior to that of the current pre-bankruptcy instruments”. The introduction of this figure entails the abolition of the current pre-bankruptcy instruments.
The initiative to request the restructuring plans corresponds to the debtor and requires that “the objective budget be met” and that it be in a “state of probable, imminent or current insolvency”. The novelty of presenting a joint communication is established in the event that it covers several companies within a group.
Administrators and bankruptcy procedure
A person who is “specially related” to someone who has provided any kind of professional services to the debtor, or who in the negotiation of a restructuring plan would have been appointed as an expert in restructuring, may not be appointed insolvency administrator. Nor those who had already been appointed to that position in three contests within the previous two years or in more than twenty creditors’ contests that are in process.
The bankruptcy procedure is also reformed by introducing a single insolvency procedure to channel both bankruptcy situations (current or imminent insolvency) and pre-bankruptcy situations (probability of insolvency). This single insolvency procedure will be applied in a mandatory manner to all debtors who fall within the legal concept of micro-enterprise.
The text refers to them as those who, on the closing date of the balance sheet, have employed during the year prior to the request to start the special procedure “an average of less than ten workers and have an annual turnover of less than seven hundred thousand euros or a liability of less than three hundred and fifty thousand euros according to the last accounts closed in the previous year”.
On the other hand, it modifies the second chance procedure, which expands the list of exempt debts and introduces the possibility of exoneration without prior liquidation of the debtor’s assets and with a payment plan, “thus allowing him to keep his habitual residence and business assets “. The exoneration of public law debts is subject to certain limits and “may only occur in the first exoneration of the unsatisfied liability, not in successive ones.”
In addition, the law also reduces the terms of the bankruptcy procedure, facilitating “the approval of an agreement when the company is viable and a rapid liquidation when it is not.”
This issue, as well as everything related to the new treatment of insolvency that the transposition of the EU Directive 2019/1023 entails, will be addressed in depth at the new Lefebvre Bankruptcy Congress, which will be held on September 29.
The bill was presented by the Government on December 23 of last year and qualified by the Congress Table on January 11, 2022, which agreed to process it through the urgent procedure. The text was modified both by the presentation, as in its debate in committee and in the plenary session of the Lower House where it was approved by 184 votes in favor and 155 abstentions.
The text sent by the Congress of Deputies was again modified in its processing in the Upper House. The amendments introduced by the Senate have been rejected in their entirety by Congress, and this text – with the wording prior to said amendments – is now ready for publication in the Official State Gazette and its entry into force.