Confianz

Etiqueta: planes de reestructuración

  • What we have learned in these two years of insolvency reform in Spain

    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.

  • The evolution of the insolvency system in Spain

    In recent years, the insolvency system in Spain has undergone significant changes that seek to adapt. In 2023, 21,298 insolvency proceedings were registered, and this year a significant increase is expected, reaching 33,623 insolvency proceedings, according to data from the General Council of Economists. This increase represents a 25% increase in corporate insolvencies and a 75% increase in individual insolvencies. These figures highlight not only the current economic challenges, but also the urgency of modernising and strengthening the system to ensure a safer and more dynamic environment.

    Bankruptcy proceedings and the situation of micro-enterprises

    In Spain, 81.5% of insolvencies are «insolvencies without mass», i.e. they lack sufficient assets to cover the costs of the process. i.e. they lack sufficient assets to cover the costs of the process. In these cases, the figure of the insolvency administrator is not mandatory, unless it is requested by a creditor, which is rarely the case. This situation raises doubts about the effectiveness of the proceedings in ensuring fairness and legal certainty for all parties involved.

    The electronic procedure for micro-enterprises, an innovation designed to streamline these processes, has had a low take-up. This could be due to technical barriers, lack of knowledge or lack of confidence in its effectiveness. Given that microenterprises represent a fundamental part of the Spanish business fabric, it is crucial to promote and facilitate access to these procedures, ensuring greater equity and efficiency.

    An added challenge is the lack of updating of insolvency administrators’ fees, which have not been adjusted to the CPI for 20 years. This not only discourages new professionals from entering the sector, but has also led to a decrease in the number of active administrators. This aspect is key to the sustainability of the system and deserves priority attention in future reforms.

    Restructuring plans

    Restructuring plans have been one of the great bets of the Consolidated Text of the Insolvency Act. This pre-bankruptcy tool allows companies to renegotiate their debts and avoid insolvency. Although its use is growing, it is still limited, especially among small and medium-sized enterprises (SMEs).

    Restructuring plans not only benefit companies by allowing them to maintain their operational activity, but also have a positive impact on the economy by reducing unemployment rates and maintaining growth assets. However, for this tool to serve its purpose, it is necessary to simplify the associated processes and to increase outreach to companies that could benefit from it.

    The future of the insolvency system in Spain

    The insolvency system must evolve to adapt to the new economic and social challenges. One of the fundamental pillars is the professionalisation of insolvency administrators. Ensuring that these professionals have continuous training in legal, economic and management areas is essential to ensure transparent and efficient processes.

    In addition, the new Insolvency Administration Regulation is expected to introduce significant improvements. This text could address issues such as the updating of fees, the regulation of access to the profession and the more efficient management of resources in insolvency proceedings. The possibility of converting insolvency administration firms into professional partnerships is also being considered, which could improve the quality and efficiency of case management.

    An opportunity to build a stronger system

    The increase in insolvency proceedings is a reflection of the current economic challenges, but it also presents an opportunity to improve the insolvency system in Spain. Tools such as restructuring plans, the digitalisation of processes and the professionalisation of insolvency administrators can make a big difference in the way companies deal with insolvency situations.

    At Confianz, we work to offer customised solutions to help companies overcome these challenges. From advising on restructuring plans to the comprehensive management of bankruptcy proceedings, we are committed to protecting our clients’ assets and ensuring their business continuity.