Selection of the main restructuring and insolvency judgments.

Requirements for subordination of claims notified out of time

For a claim notified out of time not to be classed as subordinate, it must meet the following tests: (i) it must appear in the debtors’ documents; (ii) it must be due and payable; (iii) the fact that it exists and is payable must be beyond doubt; and (iv) it cannot be overlooked by the insolvency practitioner when drawing up the list of creditors by reason of the circumstances of the case.

In Part 1, we discussed how, despite widespread usage, termination in the event of bankruptcy clauses (“ipso facto” clauses) are generally unenforceable pursuant to the bankruptcy code. In this second part, we discuss why these clauses are still prevalent in commercial transactions and the exceptions that allow for enforceability in certain situations.

Why Do Ipso Facto Clauses Remain in Most Contracts?

If ipso facto clauses are generally not enforceable, then why do practically all commercial agreements continue to include them? There are several reasons.

Practically all commercial transactions, including licenses, services agreements, and supply agreements, contain a provision that triggers termination rights, without notice, to a party whenever the other party files for bankruptcy or experiences other insolvency-related event. In Part 1 of a two-part series, we discuss how the commonly used termination-on-insolvency clauses are generally unenforceable despite their widespread use.

Standard Ipso Facto Provision

Under article 55 of the Spanish Insolvency Law, it is not allowed after the insolvency order to take individual enforcement action or initiate tax or administrative enforced collection proceedings against the debtor’s property; although until approval of the liquidation plan, administrative enforcement proceedings in which an attachment order has been issued are allowed to continue, together with enforcement actions for employee claims in which the insolvent company's assets have been attached, although certain restrictions apply.

El Tribunal Supremo concluye que la prohibición de ejecuciones una vez abierta la fase de liquidación opera tanto sobre créditos concursales, como sobre los créditos contra la masa, se trate de créditos administrativos o de otros acreedores.

Un deber fiduciario es una obligación de índole legal consistente en velar por los intereses y actuar en beneficio de otra persona.

Una sentencia del Tribunal de Justicia de la Unión Europea (TJUE) avala sustituir una cláusula abusiva de vencimiento anticipado en un préstamo hipotecario por la aplicación del artículo 693.2 de la Ley de Enjuiciamiento Civil (LEC), según el cual es válido y no abusivo iniciar una ejecución hipotecaria por impago de al menos tres cuotas mensuales.

La Ley Reguladora de los Contratos de Crédito Inmobiliario introduce un nuevo régimen de vencimiento anticipado de préstamos hipotecarios sobre vivienda habitual de personas físicas

In an order rendered on December 18, 2018, Madrid Commercial Court no 1 allowed a debtor under an insolvency order to sign and homologate a refinancing agreement after the opening of the insolvency proceedings.

The Real Estate Credit Law introduces a new regime of early termination of mortgage loans on an individual´s main residence