Privileged creditors take heed

2 de octubre de 2014

Por Iñigo de Luisa, Socio de Cuatrecasas, Gonçalves Pereira


We previously wrote about Royal Decree-law 4/2014 of March 7 (RDL 4/2014), which introduced important changes at preinsolvency stages and improved the restructuring tools and schemes in Spain. This piece of law is already effective, but is at the Parliament for final enactment and is subject to additional minor amendments. Now, Royal Decree-law 11/2014 of September 5 (RDL 11/2014), amends once again our insolvency regime both at composition and liquidation phases in order to foster financial restructuring of viable companies.


RDL 11/2014, among other key issues, extends to composition agreements some of the key measures introduced by RDL 4/2014 for restructuring schemes at preinsolvency stages. As a result, both general and special privileged creditors (including public entities) could now be specifically affected by composition plans, even in the portion covered by the value of the collateral.



Privileged creditors will now hold a privileged claim up to the amount of the value of the related security; the excess is considered to be a deficiency claim, to be classified according to its nature. For instance, the valuation of a mortgage security would be 90% of the fair reasonable value of the underlying asset. For real estate property, it would be the appraisal value as determined by an approved and homologated entity. Such value cannot exceed either the value of the privileged credit nor the maximum mortgage liability. Updated appraisal reports could be admitted later if there is a significant alteration in value during the process.


Photo credit: steakpinball / Foter / CC BY

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