This article has been contributed to the blog by David Rosenblat and Justine Erickson.

Professional compensation is often a contentious issue in bankruptcy, as we have previously discussed.

The COVID-19 pandemic hit the bottom line of many businesses. Among the hardest hit industries has been the travel industry and, in particular, airlines and aviation companies. Many airlines are still struggling to generate new ticket sales as compared to pre-pandemic levels and average fares remain depressed.¹ One industry source predicts that passenger numbers will not return to 2019 levels prior to 2024.² Compounding this are increased costs of fuel (up 35% so far this year) and other expenses.³

Rescission of an extension to a mortgage granted by the insolvent company securing a preexisting debt of a company of its group

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.

The Supreme Court clarified the insolvency categorisation for interest rate swap contracts, classifying them as insolvency credits, as they fail to meet the functional synallagma requirement, which establishes functional reciprocal obligations.

I CORPORATE FINANCE, COVENANTS AND CREDITOR’S LIABILITY 2 II NATIONAL LEGISLATION 4 III EUROPEAN LEGISLATION 5 IV NATIONAL CASE LAW 5 NEWSLETTER I CORPORATE LAW WWW.CUATRECASAS.COM NEWSLETTER I CORPORATE LAW 2/6 CORPORATE LAW NEWSLETTER I CORPORATE FINANCE, COVENANTS AND CREDITOR’S LIABILITY Introduction In the field of corporate finance the liability of creditors that negotiate covenants with companies is an issue that currently generates great concern.

The lender’s credit in respect of the joint-and-several guarantor declared insolvent is contingent unless existence of p

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.

The Madrid Provincial Court (Section 28) ruling of December 7, 2012, and the Barcelona Provincial Court (Section 15) ruling of October 4, 2012, judged the insolvency categorisation of a credit the receivers had categorised as subordinate because they held that the creditor company belonged to the same corporate group as the insolvent company.⁶ In both cases, the provincial courts analysed the concept of group for the purposes of insolvency before and after the reform of the Insolvency Act introduced under Act 38/2011.