The Spanish Bankruptcy Law-00-6453

By Author: rafalinares
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The Spanish scheme, inspired in the social and political ideas of the liberalism of the
Nineteenth century, is presided by the principle that insolvency procedures will have to
Serve as a means to aid the market discern and eliminate all those person and
Entities who have failed in their business activenesses. Our insolvency law is founded on
The faith that the market had better be given tools to self-regulate and depurate. The
Priorities are accordingly:

I) the protection of the safety of business dealings,
Ii) the preservation of the debtor's estate, as a means to enable creditors to recover their receivable to the largest extent possible, and (iii) to make sure that all creditors are given equivalent treatment - pursuant to the rule known as par conditio creditorum (with the exception of the legal privileges and preferences).

Therefore, it may be said that there is small or no concern in our legislation in regards to
Eliminating limitations for the insolvent debtor to resume its former business
Activenesses or to begin new ones.

A clear distinction may be ...
... made, nonetheless, amid the suspension of payments
(temporary insolvency, in principle) and bankruptcy (terminal insolvency, in
Principle).

In suspension of payments procedures, the debtor is only subject to the approval and
Control of its activenesses by the supervising auditors appointed by the judge, so that
Every dealing involving payment of debts, collection of credits or the undertaking
Of liabilities will have to be approved by said supervising auditors. The above mentioned
However, the debtor maintains its legal right to manage and conduct the
Business (accept when the insolvency is subsequently classified as a terminal one,
Then the judge may impose limitations on the debtor's management faculties).

On the other hand, in bankruptcy procedures, the declaration of bankruptcy entails, as
An auto consequence, the prohibition of the debtor to administer its sum totals. The
Management faculties of the debtor are assumed by the receivers that will be
Appointed amid the creditors5. The debtor may not be subsequently rehabilitated
Until the termination of the proceedings (provided that sure circumstances are
Met), unless a composition with the creditors exceptionally allows him/her to resume
Business (this would only be applicable in the bankruptcy of companies7).

This difference amid the personal consequences suffered by the debtor in
Suspension of payments and bankruptcy procedures results in exercise in an overuse of
The suspension of payments process for cases of terminal insolvency. Debtors undertake to
Benefit from the unclear legal limits amid the objective definition of suspension of
Payments and bankruptcy cases. Therefore, galore of the petitions for suspension of
Payments correspond actually to cases of terminal insolvency.

As stated by the rules governing the suspension of payments process, when the
Judge declares (grounded on the report of the supervising auditors) that the debtor's
Insolvency will have to be looked at as a terminal one, galore of the legal provisions
Governing bankruptcy cases become applicable to the suspension of payments
(possibleness of taking nullifying activenesses against sure dealings prior to the
Petition for suspension of payments; examination of the debtor's liability for the
Terminal insolvency; possibleness of imposing additional limitations on the debtor's
Managing faculties). However, even in situations of terminal insolvency, the debtor in
Suspension of payments wouldn't be disqualified for conducting business.

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http://www.articulo.org/articulo/16591/agilizar_el_concurso_de_acreedores_una_necesidad_imperiosa.html // http://www.articuloz.com/economia-articulos/el-vicepresidente-del-cgpj-pide-la-resolucion-del-concurso-de-acreedores-en-un-mes-2408211.html