Spain
International
European Union
Spain's Role for Latin American Groups in Balance-Sheet Recovery Under the EU Restructuring Directive
August 22, 2025
Don’t miss our content
SubscribeSince the landmark 2006 Avianca case, in which a U.S. bankruptcy court accepted jurisdiction over a Colombian airline based on its property nexus in the U.S., non-U.S. groups have turned to foreign jurisdictions — most notably, the U.S. chapter 11 process — to restructure their debts. This trend has been mirrored in Europe through the use of the English scheme of arrangement. In response, the European Union (EU) Restructuring Directive upgraded European restructuring tools, reducing forum-shopping except in capital structures where English law debt predominates. Latin American groups continue to employ foreign restructuring forums, such as U.S. chapter 11. In 2024, companies like WOM S.A. (a major Chilean telecommunications provider) and GOL Linhas Aéreas Inteligentes S.A. (a leading Brazilian airline) filed for chapter 11 protection in the U.S., and the trend continues. However, cost concerns and practical challenges in obtaining recognition of U.S. chapter 11 in local markets have prompted many distressed debtors to consider alternative jurisdictions. While the U.K. is a well-established alternative forum, certain EU jurisdictions — notably the Netherlands and Spain — have adopted flexible e legislation permitting foreign debtors to benefit tfrom their novel restructuring mechanisms.
See complete article at: American Bankruptcy International (ABI) Journal, 20 August 2025.
August 22, 2025
Don’t miss our content
Subscribe