Time goes by, and with it, the evolution of the legal and practical framework surrounding Law 16/2022 on insolvency reform. Two years after its entry into force, it is time to take stock, but not with a superficial view. The reality of corporate restructuring in Spain has changed, and this change is accompanied by lessons learned, challenges overcome and challenges to be solved.
Pre-bankruptcy practice
It is not news that restructuring plans are now the central focus to avoid insolvencies in Spain. However, numbers and experiences make it clear that we are not facing an easy path. Three out of four plans are still non-consensual, a fact that reflects the fact that reaching agreements between creditors and debtors is more complicated than it seemed.
In addition to this, there has been a marked increase in litigation. Increasingly, courts are the arena where the limits and possibilities of restructuring plans are defined. Is this a bad thing? Not necessarily. This litigiousness has served to clarify key concepts, such as the perimeter of affectation or class formation, fundamental elements that are still under debate.
At Confianz, we have seen first-hand how these disputes can become opportunities. Anticipation and clarity of strategy are key to avoiding problems that can otherwise escalate quickly.
Innovations that have made a difference
Internal financing and new financing have become undeniably important. This not only means more options for distressed companies, but also a change in how the affected credits are structured within aircraft. This type of financing has proven to be a lifesaver for many companies, although there is still room for simplification and standardisation in its application.
Another element that deserves attention is the figure of the restructuring expert. Their role has established itself as an essential part of ensuring that aircraft are viable and have a real impact on business survival. But not all experts are the same. Experience and practical insight make the difference between a successful restructuring and one that falls by the wayside.
The future of restructuring
Increasing judicial scrutiny is a double-edged sword. On the one hand, it ensures that restructuring plans meet high technical and legal standards. On the other hand, it increases the complexity and time needed for approval. This brings an uncomfortable reality to the table: companies that act late have less room for manoeuvre.
The tendency for creditors to file aircraft is still limited. Although this could change in the future, for now, the burden of initiative lies with the debtor. This fact underlines the importance of being well advised from the outset. At Confianz, we have learned that acting quickly and clearly in the early stages can make the difference between saving a company or letting it fall.
Finally, the capitalisation of claims, although not widespread, offers an interesting horizon for certain companies. This mechanism, together with the strategic design of creditor classes, remains an under-utilised tool with enormous potential.
The insolvency reform is not a magic solution, but it has opened doors that were previously closed. It has moved terms such as «restructuring plans», «scope of affectation» or «internal financing» out of the technical realm and into the day-to-day business world. However, its practical application remains as much an art as a science.
At Confianz, we understand that every company is different and that standard solutions do not work in such complex contexts. That’s why we focus on offering customised strategies that combine technical robustness and flexibility. Experience has taught us that, although laws are important, what really makes the difference is how we apply them.