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.

Supreme Administrative

Court Judgement of October 12, 2016

Case no. 0797/15

In this Judgment, the Supreme Administrative Court concluded that expenses related to employees, recorded as remuneration, salaries or wages, relevant to the limit of 15% foreseen for acceptance of the expenses with social benefits referred to in Article 43.2 of the CIT Code, are not limited to those that were subject to mandatory Social Security contributions.

South Central Administrative Court

Judgement of October 13, 2016

On 27 July 2014, the Regulation (UE) n.º 655/2014, of the European Parliament and of  the Council (the “Regulation”), establishing a European Account Preservation Order procedure to facilitate cross-border debt recovery in civil and commercial matters was  published.

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

Under Additional Provision Four of the Insolvency Act,¹ which regulates the courts’ sanction of refinancing agreements, the effects of the moratorium established in the agreement will be extended to dissenting financial entities, provided that the conditions specified in that precept are fulfilled (where the requisites imposed under article 71.6 of the Insolvency Act regarding the agreement itself are met and where it has been signed by creditors representing at least 75% of the financial entities’ liabilities at the time of the agreement).