On October 1, 2014, the Official Gazette of the Spanish State (“BOE”) published Act 17/2014, on urgent measures for refinancing and restructuring corporate debt (“Act 17/2014”). This act arises from Royal Decree-Law 4/2014, of March 73 (“Royal Decree-Law 4/2014”), which was approved by the Spanish Congress of Deputies and subsequently processed as a draft bill through the urgent procedure.
When an composition agreement is terminated due to non-fulfillment and the disappearance is declared of its effects over the credits, the affected credits will be recognized for their original amount, and the definitive texts will include the fraction pending of payment, even if the resulting amount after applying the debt relief agreed has been paid in full
Royal Decree-Law 11/2014, of September 5, on urgent measures in insolvency matters, introduces important reforms into the Insolvency Act regarding composition agreements and insolvency liquidation to facilitate the continuity of financially viable companies.
Any restitution and compensation agreed by the judge when the swap agreement is terminate
The insolvency administration is authorized to sell the production unit of the insolvent company Antibióticos, S.A.U. to Black Toro Capital S.A.R.L.
It used to be the case that mortgage creditors could rest easy knowing they held a mortgage, and that they would be repaid with the proceeds of the sale of the mortgaged asset, even in the event of an insolvency.
The Madrid Provincial Court applied the doctrine of the Supreme Court judgment of April 30, 2014, no. 100/20148, and declared the rescission of a personal guarantee granted by the insolvent company to secure the loan granted by a credit institution to a related company.
The Madrid Senior Commercial Judges have published the conclusions of the meetings held on November 7 and 21 on the unification of applicable criteria of the reforms of the Insolvency Act enacted by Royal Decree-Law 11/201415 and Act 17/2014.16
Claims secured with an in rem guarantee continue to accrue default interest charged to the encumbered asset and are classified as privileged.
The recent reform of the Bankruptcy Act (operated under RD 11/2014 dated September 5, 2014) intended to extend the bankruptcy agreement modifications in favor of the pre-insolvency restructuring and refinancing agreements which were introduced in March 2014.
The reform has a special provision for privileged creditors with warranties subject to specific valuation formulas, to be adjusted to the actual financial value of the guaranteed credit. Any portion of debts that exceed this value will not be considered as privileged, but will be ordinarily classified.