The magazine Economía 3 has published an article by our managing partner Antonio Ballester, analyzing insolvencies and bankruptcies, two highly topical issues affected by the legislation approved in this regard in Spain due to the COVID-19 crisis. In his opinion, the measure of postponement of the bankruptcy may be of doubtful effectiveness: “it is more than questionable that this postponement is good for the company inasmuch as it will not prevent the initiation of liens or foreclosures by creditors and there is a risk that the passage of time leads to the emptying of the company and the worsening of its financial situation.
Antonio Ballester also criticizes the effectiveness of the figure of the counterclaim or modification of the agreement: “this will depend on the acceptance of the creditors, who must approve it with the majorities provided for in the Bankruptcy Law for the agreements, so this second opportunity to the companies to be able to approve a new agreement remains uncertain, in addition to the insecurity and doubt that the absence of intervention of the bankruptcy administration generates.
In this article, the managing partner of Tomarial does consider positive “to establish that the auctions of goods and rights are all extrajudicial and that the financing and payments by related companies are considered ordinary credits. Also that the losses suffered by a company during the 2020 financial year are not considered for the purposes of dissolution due to losses, which will avoid liability claims from administrators ". But Ballester also warns that if losses are declared in 2021, the guarantee mechanism would be reactivated before creditors and administrators would have to convene a Board to dissolve the company or increase or reduce its capital.
Ballester is in favor, in case of insolvency, of acting as soon as possible: "the more likely it will be to save the company." And it bets that measures are taken to provide resources to the Administration of Justice.
From this link you can read the full article published by Economía 3.
