The SC adopts a decision on the inclusion of contractual set-off agreements that document a single financial transaction within the scope of application of Royal Decree-Act 5/2005 and on the insolvency classification of the credits resulting from financial swap, thus settling the disparity of criteria that existed in our lower case law with respect to such matters.

Privilege bestowed on (syndicated) creditors instigating the insolvency proceedings against the debtor

Preamble

Equality among all creditors (the so-called par conditio creditorum) is a basic principle under Spanish insolvency rules. Only specific exceptions envisaged in the Spanish insolvency law allow for a particular creditor to take precedence over others in the recovery of its claims against the debtor.

Generally speaking, the following ranking applies to insolvency claims (excluding predeductible claims):

Análisis GA&P | Marzo 2016 1 N. de la C.: En las citas literales se ha rectificado en lo posible —sin afectar al sentido— la grafía de ciertos elementos (acentos, mayúsculas, símbolos, abreviaturas, cursivas...) para adecuarlos a las normas tipográficas utilizadas en el resto del texto. 1. Sobre el alcance de la subrogación en las deudas laborales y de la Seguridad Social: totalidad de la deuda o contratos subrogados 1.1.

A credit institution appealed the ruling that approved the agreement claiming that the creditors meeting had allowed the presence and vote by a city council that, in its opinion, did not have such right because it was the holder of 100% of the share capital of the insolvent party.

This ruling resolved an issue originating from a personal and joint and several guarantee granted by two companies to secure the obligations assumed by a Dutch company under a junior financing agreement. In light of the Dutch company's default on one of its payments under that agreement, the creditor companies sued the debtor, and the court issued a resolution ordering the debtor company to pay the amount claimed.

A company's insolvency is requested by three of its creditors whose credits originated from a syndicated financing agreement signed with other credit institutions. The three creditors seeking the insolvency request that they all be recognized a general privilege of 50% of their credits and that the entirety of their respective credits be considered in calculating this general privilege, excluding subordinated credits only.

This ruling resolves the financial creditors' challenge to the approval of a refinancing agreement extending the deferral stipulated and the modification of the margins added to the Euribor to them. As grounds for their opposition, they claim that the 75% majority of the financial liabilities necessary to extend the reduction of the applicable margin whereby, in their opinion, such reduction entailed debt relief was not present.

Key Points

• Court considers the impact of the Spanish Insolvency Act on guarantees governed by English law
• Court holds that the liability under the guarantee was not extinguished

The Facts

The Provincial Court of Zaragoza has ruled on an appeal lodged by the General Treasury of Social Security against a Mercantile Court decision approving a liquidation plan that considered the transfer of the insolvent company as a productive unit and exonerated the buyer from social security debts.

The legal issue to consider was whether the magistrate of the Mercantile Court had the power to declare the buyer of an insolvent company exempt from paying the social security debts acquired prior to said transfer, as it did.

The Spanish High Court has recently issued a decisión (cassation appeal) confirming that insolvency proceedings are not a valid reason to justify non-use of a trademark. It is the 22nd December ruling (see here).