Background to the Restructuring Plan
The UK has introduced the Restructuring Plan; a new, flexible court supervised restructuring tool. The Restructuring Plan draws upon features of the existing Companies Act 2006 scheme of arrangement procedure (which remains available) but includes features which are new to the UK but similar to those under U.S. Chapter 11 bankruptcy proceedings.
The recent reform of the Bankruptcy Act (operated under RD 11/2014 dated September 5, 2014) intended to extend the bankruptcy agreement modifications in favor of the pre-insolvency restructuring and refinancing agreements which were introduced in March 2014.
The reform has a special provision for privileged creditors with warranties subject to specific valuation formulas, to be adjusted to the actual financial value of the guaranteed credit. Any portion of debts that exceed this value will not be considered as privileged, but will be ordinarily classified.
The Spanish Supreme Court has established the legalconcept of insolvency as an objective requirement forthe Declaration of Insolvency pursuant to Section 2.1 ofthe bankruptcy Act by virtue of the decision taken by the Court on April 1, 2014.
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