Business law · Sub-area
When financial pressure builds, from pre-insolvency to insolvency, the sooner you act, the more options remain on the table.
The law offers a tiered set of tools to a company in difficulty, almost all of which work better the earlier they are used, yet acknowledging the difficulty is one of the hardest decisions and is almost always made late. I support the company and its directors along that path, from the first cash-flow warning to insolvency proceedings, and you deal with me directly.
The field ties in with business law and, more often than it seems, with white-collar crime, because punishable insolvency is only a step away.
The notice of the opening of negotiations (article 585 of the consolidated Insolvency Act) opens a three-month window, extendable by another three (articles 600 and 607), during which the company is shielded from enforcement against the assets it needs to keep operating, except by public creditors (article 605). Restructuring plans (article 614) allow the debt to be reorganized not only when insolvency is likely but also when it is already imminent or actual (article 584). This is the ground reinforced by Act 16/2022.
When insolvency is already actual or imminent (article 2 of the consolidated Insolvency Act), the proceedings can be geared toward continuing the business, which the declaration does not interrupt (article 111), or toward an orderly liquidation (articles 406 et seq.). If the company is a micro-enterprise (fewer than ten employees and annual turnover below €700,000 or liabilities below €350,000), both these proceedings and the pre-insolvency tools give way to the special procedure for micro-enterprises (articles 1.2, 583.4 and 685 of the same Act).
The insolvency is classified as culpable where willful misconduct or gross negligence has contributed to creating or worsening it (article 442). A culpable classification can carry personal consequences for the directors (articles 455 and 456), which is why I recommend documenting due diligence well in advance.
The discharge of unsatisfied debts (article 486 of the consolidated Insolvency Act) allows a good-faith debtor to be released from debts they have been unable to pay, a mechanism reserved for individuals, whether or not they run a business.
I support the director in managing the crisis and watch the line with criminal law (concealment of assets and frustration of enforcement, articles 257 and 258 of the Spanish Criminal Code), which in these matters is never far away.
I start with the numbers, meaning the cash-flow and balance-sheet position, then compare what pre-insolvency, restructuring and insolvency proceedings each offer, and draw up a plan before the calendar imposes one.
Spain's insolvency law has been reformed heavily in a few years, so I check each citation against its official source and confirm which wording applies. What you get from me is a frank assessment of each option and its risks, and where the facts call for it the criminal-law side of the firm joins the analysis.
See how I workEach guide takes one specific situation further, with the rules and deadlines that govern it.
Tell me about your situation and I will tell you, frankly, how I can help.
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