Economic expectations for the coming months continue to be complicated for Spanish companies. On June 30, there was the end of the bankruptcy moratorium after two years and several extensions after its implementation.
This measure was adopted by the Government with the aim of reducing the damage caused to companies by the pandemic, however, as a result of its multiple extensions, it has generated a pool of companies in a situation of insolvency without processing the procedure.
Now, after the end of the moratorium, it is very likely that most of these companies will request bankruptcy proceedings, which can cause an extra workload in the commercial courts.
From the Abencys office, a legal firm specializing in insolvency and restructuring, it is alerted to the increase in the number of companies that, despite having tried to continue their activity protected by the moratorium that exempted them from the obligation to present competition, they have not been able to carry out their activity under normal conditions during all this time. Once this state of exception has ended, these companies they can now enter bankruptcy proceedings with a unfeasible situation and seriously aggravated, a factor that, according to firm experts, favors liquidations.
According to Luis Martín, a partner at Abencys, this scenario will cause a constant trickle of requests for contests in the coming months, which will pick up speed from this month of September and will probably continue until the end of the year. “Exempting companies in difficulty from entering bankruptcy has only lengthened, and therefore worsened, their delicate situation, since submitting bankruptcy on time is a key factor in ensuring the survival of the company”.
Business liquidations will also increase
At the end of the moratorium, the recently announced entry into force of the new bankruptcy law as the two most notable milestones within the sector in recent months. If the bankruptcy moratorium has caused an increase in companies in bankruptcy proceedings, the reform of the bankruptcy law, for its part, gives priority to quick resolutions of the same.
Additionally, Luis Martín, partner of Abencys, explains that “the foreseeable economic situation of recession, more than two consecutive quarters with a decrease in the economy, will favor the liquidation of companies”.
