News

Bankruptcy administrators go to Strasbourg to avoid working for free

The Professional Association of Bankruptcy Administrators (ASPAC) wants to defend the rights of its clients and to do so, it ensures that it will go to the last instance.

The body has pointed out on different occasions the need to establish fair conditions for this guild, focusing on fair fees. Faced with the abandonment to which they point out that they are subject, the bankruptcy administrators have filed an recourse to the European Court of Human Rights in Strasbourg for avoid working for free

A problem that has been increased by recent rulings that, retroactively, would force administrators to return the remuneration received for contests that have exceeded the fixed duration, but that began under another regulation that did not provide for it. That is, they would be returning some fees charged during their work period, making their services free. They emphasize that this situation will also worsen with the measures proposed by the new Bankruptcy Bill.

One of the most criticized points of the reform in this regard establishes time limits for insolvency administrators to receive their fees in insolvency proceedings. According to Diego Comendador, president of ASPAC, “The supposed intention of this measure is to speed up the processes, which means that they are blaming the insolvency administrator for their duration and imposing this measure as a punishment”.

Warning, scroll to continue reading

From the association they insist that the mission of the bankruptcy administrator is to facilitate the management of the contest and improve its efficiency. Therefore, they argue that cannot be penalized professionals for the duration of the contest, since on the contrary, thanks to their experience and specialization in the area, they avoid reaching longer times. They also point out that “While they try to reduce time by asking us to work for free, they are charging the courts with work that could be resolved by the bankruptcy administration to speed up procedures that are the ones that really prolong the processes unnecessarily.”

According to official statistics, the average duration of bankruptcy proceedings is about four and a half years. However, each specific case has a series of characteristics that will extend or reduce its duration. In insolvency proceedings, the interests of different parties come into play, which can lead to conflict situations that prolong the process. Commander stresses that “The danger of establishing this penalty for the administrator is that it can affect the quality of the work, leading to accelerated liquidation processes that would not fulfill their role of optimizing the value of the assets.” And he adds “the bankruptcy administrators are not, at all, responsible for the long duration of the procedures”.

Bankruptcy fees in the Bill

Regarding the remuneration of administrators, the new text indicates that when the common phase exceeds 6 months, these professionals would stop receiving 50% of their fees. In liquidation, this reduction would also correspond to a minimum of 50%. In addition, the Project establishes that the initially set fees would be limited if the process is extended by more than half the legal term or is extended by more than 12 months from the declaration of the contest.

Commander points out that “We cannot work for free, we are professionals and our mission is that bankruptcy proceedings are carried out with legal security and fairness for all those involved. The punitive measures imposed in the new bankruptcy law are contempt for the work of the bankruptcy administration, which has always been at the service of the country’s economy. We are not the problem, we are the solution. A specialization and regulation of the profession are the factors that will really improve the system.”

Related Articles