The rescission was declared of a mortgage the insolvent company  granted over a  warehouse it owned in guarantee of the  loan a credit institution  had  granted to a company of its group. The Supreme Court declared (i) that the contextual guarantee was  for consideration and (ii) the need for proof of the profit (even indirect) of the guarantor  company without merely belonging to the  group sufficing, and  confirmed that the  rescission only affected the guarantee and not the loan.

SUPREME COURT RULING OF APRIL 9, 2014, NO. 175/2014: IN THE RESCISSION OF THE  ASSIGNMENT IN PAYMENT AGREEMENT (DACIÓN EN PAGO), THE CREDIT OF THE NONDEFAULTING PARTY  IS AN  INSOLVENCY CLAIM AND NOT AGAINST THE INSOLVENCY ESTATE

The assignment in payment (dación en pago) of debt is an act extinguishing obligations and not a bilateral agreement. Therefore, its rescission leads to an insolvency claim for  the non-defaulting party.

A creditors’ composition agreement has been approved for Pescanova, and section six of  the insolvency proceedings (categorisation of the  insolvency) has not been opened, as  there is  a type of creditor whose  moratorium is less than three years and  whose debt  relief is below one third.

GRANADA  COMMERCIAL COURT NO. 1  RULING  OF MARCH 17,  2014; LOGROÑO  COURT OF FIRST INSTANCE NO. 6 DECREE OF APRIL 25, 2014; BARCELONA COURT OF  FIRST INSTANCE NO. 38 DECREE OF MAY 14, 2014; AND PONTEVEDRA COMMERCIAL  COURT NO. 2  DECISION  OF JUNE  6,  2014:  FIRST DECISIONS ON THE  SUSPENSION OF  ENFORCEMENT PROCEEDINGS UNDER ARTICLE 5  BIS OF THE INSOLVENCY ACT AFTER  ROYAL DECREE-LAW 4/2014

BARCELONA PROVINCIAL COURT (DIVISION 15)  RULING  OF APRIL  3,  2014, NO.
116/2014, AND  LA CORUNA PROVINCIAL COURT (DIVISION 4) RULING OF APRIL  22, 
2014, NO. 118/2014: ARTICLE 90.1.6 OF THE INSOLVENCY ACT REFERS TO THE PLEDGE SECURING FUTURE CREDITS

Two new decisions on article 90.1.6 of the Insolvency Act coincide in stating that the last  point of this precept refers to the pledge securing future credits, and not to the pledge over future credit rights.

For municipal bond investors and insurers, recent events in Puerto Rico have become a major concern.  Puerto Rico has tried to address its mounting debt crisis by enacting legislation that would create, in effect, a quasi-bankruptcy court to provide restructuring relief for certain public corporations that have issued revenue bonds, including the Puerto Rico Electric Power Authority, the Puerto Rico Aqueduct and Sewer Authority and the Puerto Rico Highways and Transportation Authority.

(ORDONNANCE Nº 2014-326 DU 12 MARS 2014 ET DÉCRET NO 2014-736 DU 30 JUIN 2014)

La nouvelle ordonnance nº 2014-326 du 12 mars 2014 modifie avec environ 120 articles essentiellement insérés dans le Code de Commerce, le régime des entreprises en difficulté. Un décret d’application publié le 30 juin 2014 a précisé les détails de ce texte.

Nous exposons ici quelques points principaux de la réforme (liste non exhaustive) :

On Saturday, June 28, Puerto Rico’s Governor Padilla signed into effect Puerto Rico’s new bankruptcy law for certain revenue bond issuers.  Within 24 hours of the statute’s enactment, two mutual fund complexes owning approximately $1.7 billion in bonds of the Puerto Rico Electric Power Authority (PREPA) filed a complaint in the federal district court for Puerto Rico, seeking a declaratory judgment invalidating the fledgling legislation.

The Supreme Court has spoken once again on the limited jurisdiction of the bankruptcy courts, adding to the understanding derived from Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982), Granfinanciera v. Nordberg, 492 U.S. 33 (1989), Langenkamp v. Culp, 498 U.S. 42 (1990) and Stern v. Marshall, 131 S. Ct. 2594 (2011). Executive Benefits Insurance Agency v. Arkinson, Chapter 7 Trustee of the Estate of Bellingham Insurance Agency, Inc., 573 U.S.

Puerto Rico’s Governor Alejandro Garcia Padilla today introduced debt restructuring legislation which he urged the legislature to enact by June 30 and which, if enacted, would provide a judicial debt relief process in Puerto Rico’s courts for certain public corporations, including the Puerto Rico Electric Power Authority (“PREPA”), the Puerto Rico Aqueduct and Sewer Authority (“PRASA”) and the Puerto Rico Highways and Transportation Authority (“PRHTA”).  Despite a semantic effort at today’s press conference by the Governor and in the legislative preamble to distinguish the proposed leg