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.
INTRODUCTION
A credit institution that is the indirect owner of an insolvent company’s share capital is not a person closely related to the insolvent company, unless it uses an intermediary to avoid that status.
The court ruled to allow the sale of the production unit with assignment to the acquirer of the agreements involving the insolvent companies affected by the transfer of the production unit and necessary for its continuance.
For insolvency purposes, the concept of “group” is defined in article 42 of the Spanish Commercial Code, which refers only to groups subject to control that have the legal obligation to consolidate their accounts, while excluding horizontal or co-ordinated groups.3
Assignment of a credit with recourse transfers ownership of the credit to the assignee when the transfer is approved and allows the assignee to request that it is separated from the assignor’s insolvency assets.
In both rulings, the Supreme Court stated the effects of assignment of a credit with recourse on the assignor’s declaration of insolvency.
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
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.
Madrid Commercial Court No. 6 order of October 7, 2013: acquirer of a production unit subrogated in employment liabilities because the shareholders and directors had established the company specifically to acquire the insolvent company ("Marco Aldany Case")
The court did not rule out liability for employment obligations because the partners - directors of the insolvent company wished to acquire the production unit through a company created specifically to acquire it.