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Bankruptcy
Is your company facing an economic crisis?
Are you struggling to pay your debts to your suppliers?
Have you not paid your employees for more than two months?
Do you have unpaid dues with the Banks, Tax Authorities or Social Security?
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Responsible: Anteo ETL
Purpose: Collection of personal data in order to be able to attend to your request.
Legitimation: Subject’s consent
Recipients: No data will be disclosed to third parties, unless required by law.
Rights: Access, rectify or delete data, as well as other rights, as explained in the additional information.
Many businesses are being strongly impacted by the current economic crisis and, unfortunately, many business owners are finding themselves in a dire situation where the company’s assets are not enough to satisfy the debs owned to suppliers, employees and other creditors.
What can we do about it?
Our legislation contemplates insolvency proceeding: a procedure aimed at ensuring these debtor companies to meet, as far as possible, their creditors’ debts in an orderly manner.
BANKRUPTCY
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If you still have any doubts about insolvency proceedings or you are concerned about your company’ financial situation, do not hesitate to contact us. We will gladly study your case and advise you accordingly.
Read more about GPDR compliance
Responsible: Anteo ETL
Purpose: Collection of personal data in order to be able to attend to your request.
Legitimation: Subject’s consent
Recipients: No data will be disclosed to third parties, unless required by law.
Rights: Access, rectify or delete data, as well as other rights, as explained in the additional information.
How do we do it?
Each insolvency proceeding is different and has its own peculiarities. The proceeding is organised in four phases, albeit, not all of them need to take place. Some proceedings will conclude with refinancing agreements, whereas in other cases there will be no other alternative than liquidation and subsequent closure of the company.
1. Common phase
- The Commercial Judge examines the petition for declaration of insolvency and issues a declaration ruling either approving or rejecting the petition for insolvency.
- The insolvency administrator is appointed to evaluate the debtor’s situation and draw up a report with all the relevant details that will be considered in the insolvency proceeding.
- The equity of the insolvency proceeding is determined which comprises the active mass i.e. all the assets and rights that are part of the debtor’s equity at the time of the declaration of insolvency, and the passive mass, i.e. the existing debts and credits against the debtor which are classified as special privileges, general, ordinary and subordinated credits.
2. Settlement phase
- This phase aims to reach an agreement between the debtor and the creditors to satisfy the pending debts. To this end, proposals for an agreement are drafted, which can include motions for a debt waiver or a waiting period, or both, and a payment plan.
- A meeting of creditors is summoned to vote on the proposal most favourable to their interests.
- The agreement proposal that obtains a sufficient majority and, as long as it is not defective, will be approved by the Judge. A follow-up will be carried out to ensure compliance.
3. Liquidation phase
- This phase may be initiated in any time during the proceeding upon the debtor’s request. In any case, it will be initiated when there are not enough proposals or when none of the proposals submitted have been successfully approved.
- All the debtor’s assets and rights are liquidated and the pertinent procedures are carried out to settle the debtor’s customer debts, pending Tax Authorities refunds, etc. All of this so as to satisfy the maximum debt possible, following the order of priority determined by law.
4. Qualification phase
Once the insolvency proceeding has been successfully completed, the Judge will issue a ruling classifying the insolvency proceeding either as fortuitous or at fault, following the report issued by the Insolvency Administration and the Public Prosecutor’s Office.
In the event that the insolvency administrator has not complied with the legal obligations or has caused and aggravated the insolvency situation, as being the most relevant causes, the insolvency proceeding will be classified as at fault.
Laura Pedreño
Irene Pedreño
MORE THAN 30 YEARS OF EXPERIENCE
Tax advisors and business consultancy
At ANTEO we have a team of lawyers specialised in insolvency proceedings who will offer you constant and personalised counselling at all times, so that you feel guided and informed at all stages of the procedure.
FAQ
Frecuently asked questions
Am I required to file for insolvency proceeding?
Any company in a situation of insolvency is obliged to file for insolvency proceeding within two months of learning or ought to have learned of the state of insolvency.
The company is presumed to be in a state of insolvency when it falls into one of the following situations:
- When there are seizures due to pending executions affecting the company’s equity in a general manner.
- When there is a rushed or dilapidated liquidation of its assets.
- When there is a generalised failure to comply with tax, Social Security or labour obligations for three consecutive months.
How does the declaration of insolvency affect employees?
The declaration of insolvency does not imply the cessation of the company’s activity. Until it is established otherwise, the employees’ contracts remain in force in terms of rights and obligations; the workers are obliged to work and the company is obliged to pay their remunerations.
However, if the company does not have sufficient liquidity to pay the wages, the Wage Guarantee Fund (known in Spanish as “FOGASA”) steps in and will cover the payment within the limits established by law.
Who is the Insolvency Administrator?
The insolvency administrator is the person appointed by the Judge whose main function is the management and administration of the company declared in insolvency proceeding.
He or she is in charge of assessing the company’s situation, examining the inventory and listing the list of creditors, all of which is included in a report that will be necessary to reach a settlement agreement or liquidation.
Can an individual file for insolvency proceedings?
Yes, in 2015 the Second Chance Law was passed, which allows individuals in insolvency situation to file for insolvency proceeding in order to reach an agreement with their creditors or to liquidate their assets and get part of the debt waived.
INSOLVENCY PROCEEDINGS
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Contact us by phone or by form and we will get back to you as soon as possible.