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.

 CONTENTS CORPORATE LAW NEWSLETTER I MARCH, 2017 I CAPITALIZAR PROGRAMME – PRESS RELEASE FROM THE COUNCIL OF MINISTERS OF 16 MARCH 2017 2 II NATIONAL LEGISLATION 5 III NATIONAL CASE LAW 6 NEWSLETTER I CORPORATE WWW.CUATRECASAS.COM NEWSLETTER I CORPORATE 2/7 NEWSLETTER CORPORATE LAW I CAPITALIZAR PROGRAMME – PRESS RELEASE FROM THE COUNCIL OF MINISTERS OF 16 MARCH 2017 One of the priorities of the programme of the 21st Constitutional Government is to reduce the high level of corporate borrowing and to improve conditions for investment, which is why the capitalisation of companies is one

Financial institutions are not de facto directors of the insolvent company because they do not significantly affect the performance of the insolvent company’s activity, but only ensure that  certain costs do not affect the repayment of their loan.

Comsa: debt restructuring PSA Financial Services Spain: establishing an asset-backed securities fund Emesa: subscribing a collar equity swap Proposal for an EU Directive on restructuring and second chance Exit right due to no dividend distribution: end of the suspension of art.

Spanish Royal Decree-Law 4/2014, passed on March 7 2014, has considerably changed the rules for the court-sanctioning of so-called Spanish schemes of arrangement. Amongst those changes, the reform has lowered the majorities required to achieve a Spanish scheme. Currently, a majority of at least 51% of the financial liabilities held by all creditors at the time of the refinancing agreement (acuerdo de refinanciación) approval, will suffice to request the insolvency judge to sanction the agreement, so it is considered ringfenced and protected from any challenge for rescission.

The fumus boni iuris used to justify the adoption of interim measures, involving blocking the enforcement of a financial guarantee, was counteracted since the pledge was fully enforceable under Luxembourg law, which was the governing law.

The parties had agreed to institute a financial guarantee on certain shares owned by the insolvent company and the pledge was made subject to Luxembourg law, because the account where the shares were deposited was located in Luxembourg.

On March 18, 2014, the Bank of Spain gave credit institutions consistent criteria to apply the provisions of Circular 4/2004 to restructuring transactions resulting from the refinancing agreements regulated under the Insolvency Act, complying with the stipulations of Additional Provision One of Royal Decree Law 4/2014, which assigned the drafting of those criteria to the Bank of Spain.

Royal decree-law 4/2014, on urgent measures for refinancing and restructuring corporate debt: amends the Insolvency Act and the exemption on mandatory takeover bids for rescue operations, and extends the special regime for calculating losses due tue impairment

I  FRAMEWORK OF AVAL

Legal Framework of Aval

The aval consists of a personal guarantee of obligations that is typical of debt securities – in particular bills of exchange, promissory notes and cheques – and enormously important given how often the same is used in practice in the commercial activity, namely the provision of aval to commercial companies, makers of debt securities.

Financial entities. Royal Decree-Law 14/2013, of November 29, on urgent measures to adapt Spanish law to European Union law on the supervision and solvency of financial entities. (BOE 287, November 30, 2013)

European Union law on the supervision and solvency of financial entities (Basel III) has been incorporated into Spanish law.