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.

A new Statement of Insolvency Practice 16 ("SIP 16") relating to pre-packaged sales in administration ("Pre-Packs") came into force on 1 November 2013.

The matter subject to this analysis is decision taken by a Bankruptcy Administration dealing with three companies of the same company group which are involved in a bankruptcy proceeding. Given the situation and in response of the confusing information of assets, the Administration under discussion decided to gather the three companies joining all their creditors in a sole debt pooling and besides, joining all the rights and assets of the three companies.  

The object of this article is to analyze a controversial issue which is considered in recent times by the Mercantile Courts as a current incident involved in the Bankruptcy Proceedings and more specifically, to analyze the Judgement issued by the Court of First Instance no. 9 and Mercantile Court of Cordoba dated April, 19th 2010, in which the aforementioned incident is involved.  

This incident is essentially based on establishing the treatment that should be granted to the additional guarantees provided by third parties in bankruptcy proceedings.  

In August 2009, an English court sanctioned the use of a scheme of arrangement to restructure the debt of IMO Car Wash Group, a highly leveraged UK based car wash company. This decision follows the similar use of schemes of arrangements in other restructurings. For example earlier this year an English court sanctioned the use of a scheme in the debt restructuring of McCarthy & Stone. In both of these restructurings, the subordinated creditors were left with no value for their debt claims.

In August 2009, an English court sanctioned the use of a scheme of arrangement to restructure the debt of IMO Car Wash Group, a highly leveraged UK based car wash company. This decision follows the similar use of schemes of arrangements in other restructurings. For example earlier this year an English court sanctioned the use of a scheme in the debt restructuring of McCarthy & Stone. In both of these restructurings, the subordinated creditors were left with no value for their debt claims.