Refinancing and Out-of-Court Settlements
| Autor | Benjamin Nicolau y Santiago Torent López de Lamadrid |
Alternatives to the bankruptcy proceedings in Spain.
While it is true that in many cases insolvency declaration may be the only mandatory way out and in others it may be a solution, or the only solution, the fact remains that there are other alternatives to give viability to a company.
The Capital Corporation Law 1/2010, July 2nd, establishes as a cause for the dissolution of a corporation in its article 363, section d, that "the losses that reduce its net assets to an amount under the half of the social capital unless it is increased or decreased in a sufficient amount and when the declaration of bankruptcy is not appropriate". This declaration would be appropriate, in addition to the causes envisaged in the following sections of the aforementioned article, when it would be foreseeable that the dissolution wouldn’t be possible, affording the whole of the requirable liabilities with the liquidation of the corporation assets in a sorted way.
In its article 327, referred to anonymous corporations, the capital reduction is mandatory when losses have reduced its net worth below the 2/3 of the share capital and one year has elapsed without having recovered
For all corporations, art. 317 provide that the capital reduction can take place to restore the balance between capital and equity of the company declined due to losses.
The Insolvency Law, 22/2003, July 9th, establishes that is in insolvency situation the debtor who cannot afford regularly its requirable obligations. The insolvency declaration should be requested within the two months next to the date in which the debtor has known its insolvency situation, supposing that it exists when some of the causes of the necessary insolvency declaration happen:
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- General cessation of the current payment obligations of the debtor.
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- The existence of seizes for pending executions that affect in a general way the debtor’s assets.
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- The concealment or the quick or the ruinous liquidation of the debtor’s assets.
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- The general breach of some of the following obligations: payment of tax liabilities requirable the three months before the insolvency declaration request; payment of the Social Security fees, and other joint collection concepts during the same period; payment of salaries, severance pays and other salaries derived from the labor relations corresponding the three last monthly payments.
Regardless of the eventual obligatory nature of the insolvency declaration request, in some cases it...
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