The reform of the Spanish Insolvency Act 

Restructuring plans in Spain
1 de septiembre de 2023
On 26 September 2022, the reform of the Spanish Insolvency Act implementing the EU Restructuring Directive entered into force.

The reform represents a major overhaul in the Spanish restructuring framework and a considerable upgrade to the previous restructuring toolkit, bringing it closer to a US Chapter 11 or an English scheme of arrangement with the introduction of concepts such as:

  • class formation;
  • the possibility of cross-class cramdown of existing shareholders and secured creditors;
  • the absolute priority rule;
  • the reverse rule;
  • the "best interests of creditors" test; and
  • the rejection of executory contracts.
This paradigm shift is accompanied by a number of ambitious measures aimed at enhancing the rescue culture and preventing debtors from attempting to detail restructuring proceedings with opportunistic actions. These measures include enabling creditors to present a restructuring plan or to stay an insolvency petition filed by a debtor.

See complete chapter at: Investing in Distressed Debt in Europe. The TMA Handbook for Practitioners, Second Edition. Globe Law and Business, 2023.


1 de septiembre de 2023