These resolutions clarify the circumstances in which an appraisal certificate is required to create and amend mortgages following the reform of the Rules of Civil Law Procedure under Act 1/2013.
Royal Decree-Law 4/2014, of March 7, on urgent measures for refinancing and restructuring corporate debt, substantially amends the Insolvency Act (particularly regarding the regulation of refinancing agreements and their court sanctioning, and other pre-insolvency institutions). It also modifies the exemption on mandatory takeover bids for rescue operations and extends for one more year (and broadens the scope of) the special regime for calculating loss based on impairment in cases of mandatory capital reduction and mandatory dissolution of companies.
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MADRID E-BULLETIN
RESTRUCTURING, TURNAROUND AND INSOLVENCY
REFORM OF SPANISH INSOLVENCY LEGISLATION
On Friday 7 March 2014 the Spanish Council of Ministers approved Royal Decree-Law 4/2014, of 7 March, which adopts urgent measures on the refinancing and restructuring of corporate debt. The above Royal Decree-Law introduces a series of significant reforms to the Spanish Insolvency Act 22/2003, of 9 July, (the "Insolvency Act"). The Royal Decree-Law has entered into force on 10 March 2014.
Royal Decree-Law 14/2013 ("RD-L 14/2013"), of 29 November, of urgent measures to adapt Spanish law to European Union regulations on the supervision and solvency of financial institutions, that entered into force on 1 December, clarifies the insolvency qualification regime applicable to the credits transferred by SAREB, to third parties, thus modifying section h) of article 36.4 of Act 9/2012, of 14 November, on the restructuring and resolution of credit institutions ("Act 9/2012").
Market participants welcome a clarification extending equitable subordination exemptions granted Sareb to those subsequently purchasing debt from Sareb.
On November 30, 2013, the Spanish legislator approved a recent amendment to Spanish insolvency law, introduced in March 2013, to clarify that a claim transferred to Spanish “bad bank” Sareb, and subsequently sold by Sareb to a third party, will also be exempt from equitable subordination risk.
Background
Act 14/2013, of September 27, 2013, favoring entrepreneurs and their internationalization (the “Act”), introduces a wide range of reforms on insolvency, corporate, tax and labor matters. Regarding insolvencies, it takes a more flexible approach to the quorum of financial creditors required for court-sanctioned refinancing agreements and it regulates out-of-court agree-ments for payment as mechanisms for out-of-court negotiation with creditors.
REFINANCING AGREEMENTS
Con la finalidad de agilizar la tramitación de los procedimientos de ejecución, reforzar las expectativas de cobro del deudor, dotar de mayor seguridad jurídica al mercado, y en última instancia, para tratar de dar respuesta a algunos de los problemas económicos –y socialesde los últimos tiempos, el Proyecto de Ley Orgánica de Reforma del Código Penal (en adelante, “el Proyecto de Reforma”) propone una nueva regulación de los delitos de alzamiento de bienes e insolvencia punible.
On September 27, Law 14/2013, on support to the internationalization of business, was approved (Spanish Official Gazette of September 28). From its entry into force on October 18, the procedure for out-of-court settlement of payments will be implemented, which is a new mechanism of debt renegotiation prior to the declaration of insolvency and an alternative to the so-called “pre-insolvency”, aimed to individual entrepreneurs, freelancers and small and medium-sized businesses that have not yet been declared insolvent whose assets and liabilities meet certain re
New criteria set out by the Bank of Spain will have a binding nature for supervised financial entities
Introduction
On 30 April 2013 the supervisory body of the Bank of Spain sent a formal communication to the financial entities subject to its supervision containing the criteria to be used with regard to the definition, documentation, follow-up and review of credit refinancing and restructuring transactions (the Communication).
Act 38/2011, of 10 October, which reforms the former Spanish Insolvency Act, introduces a number of measures, including the possibility of obtaining court approval for refinancing agreements meeting certain requirements to extend the agreed debt rescheduling to certain creditors that have either opposed the refinancing agreement (i.e. dissident creditors), or that have not participated in it.
Additional Provision 4 of the Insolvency Act establishes that court approval for refinancing agreements may be sought by the debtor if they meet the following conditions: