According to data from the Registrars of Spain, more than half of the bankruptcy proceedings that were declared in the country during the fourth quarter were without mass, that is, those that occur in companies without assets or liquidity to meet their debts. Faced with this situation, the Abencys law firm, an expert legal firm in bankruptcy and insolvency, points to the bankruptcy moratorium as the main cause of this increase.
The bankruptcy moratorium was approved to help companies affected by the Covid-19 pandemic to try to avoid filing for insolvency and thus, reduce the number of insolvencies and liquidations. However, this measure, due to its multiple extensions, has had a side effect that experts were already warning about.
Javier Diaz Galveza partner at Abencys, explains that many of the companies that took advantage of the moratorium to temporarily delay their payment obligations, avoid the liquidation of their assets and gain time to reorganize, many of them have not been able to turn their situation around and , after the end of the moratorium, they have no choice but to declare bankruptcy, seeing their situation worsen considerably and without sufficient assets to meet the debts.
“Lack of liquidity is one of the main problems facing Spanish companies today. This situation, caused by the current economic instability, is aggravated by the consequences of the excessively prolonged bankruptcy moratorium, increasing the number of zombie companies that, after the end of the moratorium and their lack of assets, have no other choice. to take advantage of a contest without dough”, explains Javier Díaz Gálvez.
Faced with this situation, the office reminds us that alternative measures must be adopted to guarantee that companies with financial problems can be reorganized effectively, avoiding its liquidation. Specifically, Díaz Gálvez recalls that an early declaration of bankruptcy can cause damage to companies to be resolved, thus ensuring their survival.
Business liquidations will increase in the coming months
Given the increase in bankruptcy proceedings without mass that are currently detected, and following the latest developments dictated by the new Bankruptcy Law, From the Abencys office, they anticipate that the number of company liquidations will increase in the coming months.
In addition, Javier Díaz Gálvez warns that this situation will particularly affect the self-employed and small businesses. “The current scenario of economic recession, added to the bankruptcy data that has been detected in recent months in the self-employed, makes us anticipate that this trend will increase in the coming months.”
