Analyzing the main judicial trends in pre-insolvency restructuring plans
As in the previous two years—in which we presented the Guide | Assessment of the first year of implementation of the insolvency reform (November 2023) and the Guide | Assessment of the second year of implementation of the insolvency reform (November 2024)—we are pleased to publish a third edition offering a critical, practice-oriented reading of the most relevant judicial criteria on the key issues of current interest concerning pre-insolvency restructuring plans. This year we have taken both a quantitative and qualitative leap forward in our review of judicial and market practice: we analyze more than 120 transactions based on nearly 140 court decisions handed down between November 2024 and October 2025. The result is a mature assessment of an ecosystem that already operates with well-established technical standards, while at the same time revealing new lines of friction and interpretation that have a direct impact on the design, approval and execution of restructuring plans.
Main trends
Accumulated experience has brought greater judicial scrutiny, a denser body of criteria and, in parallel, a notable uptick in litigation. The Guide aims to systematize the criteria and highlight the developments, seeking greater predictability in a field that is becoming increasingly technical. The following trends are particularly noteworthy:
- Judicial scrutiny at the sanctioning stage has intensified and consolidated, with more orders proactively examining substantive criteria. This tighter control has also led to more denials of sanction where gross or structural defects are detected.
- The practice of successive extensions—beyond the first—of the effects of the notice of the opening of negotiations has been consolidated, with orders admitting second and third extensions where there are objective grounds and demonstrable progress in negotiations.
- The possibility of affecting interim financing within the perimeter, and classifying it in a separate class—almost always decisive in meeting approval rules—has been generally accepted. A few isolated decisions deny such affectation and have refused sanction where this practice was used artificially.
- The debate is gaining ground over whether the appointment of a restructuring expert is required in all non-consensual plans.
- Litigation has increased significantly, with more challenges being upheld in whole or in part, and with deeper judicial analysis of various grounds of challenge.
- The resistance test has been firmly established as a technique of judicial control to assess the real impact of defects in class or perimeter formation, preserving plans where the defect does not alter majorities or approval rules.
- We are gradually seeing intragroup third-party releases, with reinforced evidentiary requirements regarding the insolvency risk for both guarantor and debtor.
- Although still a minority, new cases are emerging in which creditors promote plans over the opposition of the debtor and its shareholders, resulting in changes of control through debt-to-equity swaps.
Fulfilling our commitment to sharing the work of our Restructuring, Insolvency and Special Situations team with the market, we at Cuatrecasas hope this Guide will be useful to scholars and practitioners in corporate restructuring, reaffirming our purpose of contributing to knowledge and to the evolution of the state of the art by promoting technical excellence.