On November 26 came into force the new Bankruptcy Law. Initially, it is understood as a solution when dealing with the large number of insolvencies filed, especially after the end of the insolvency moratorium.
Faced with this new scenario, the experts at Abencys, a firm specializing in insolvency and restructuring, warn of the consequences that this new law may have on bankruptcy proceedingsas well as the administrative figures of the bankruptcy process and the companies themselves in difficulty.
The main key to understanding this reform lies in the change of the legislation of the restructuring processes, with preventive measures of insolvency and with the aim of streamlining bankruptcy procedures and establishes a specific regulatory framework for small companies. This legislative change, which profoundly affects Law 22/200 and its multiple amendments, occurs as a result of the transposition of the corresponding EU directive.
In the case of micro-enterprises, whose processing is developed in the third book, it is intended prioritize a quick contest model, in which internal figures that were typically essential when managing a contest, would remain in the background. Specifically, the figure of the administrator loses its fundamental role in the insolvency process. This novelty means that the process remains in the hands of the debtor with the consequent risk for the creditors.
Abencys experts believe that this modification, designed as a measure to facilitate the insolvency process of companies, may have a result contrary to the interests of creditors, endangering the value of assets or the continuity of business activity .
For Luis Martín, partner of the firm, this measure, more than a help, supposes a danger for the companies in competition. “With the new Bankruptcy Law, advance solutions and quick contests are prioritized. Although this reform is a way to streamline processes and avoid judicial collapse, it will in turn cause less effective management of the same, thus harming companies in restructuring processes”explains Luis Martin.
For this reason, in the coming months, Abencys plans a increase in settlements of companies within the Spanish market, closing the year with record figures. According to Luis Martin, “We still cannot know for sure what effects the new law will have on companies in difficulty. However, it is likely that this will bring with it a large number of closures of companies that have not been able to overcome the competition as a result of an early resolution”.
The administrator: key figure for the good resolution of the contest
Faced with this situation, the Abencys firm reaffirms the importance of bankruptcy administrator as a key factor when it comes to a good resolution of a contest, as well as requesting it on time, to avoid a situation of irreparable damage.
In this line, Luis Martín points out that, “The role of the administrator prioritizes the satisfaction of creditors’ claims and the continuity of business activity, provided that the circumstances of profitability and solvency occur that encourage creditors to approve an agreement, a refinancing agreement or the sale of assets. the productive unit.
