Blog de ÀLEX PLANA PALUZIE
[Between laws & precedents] The purpose of this blog is to analize the legal system of Catalonia, Spain and Europe. It focuses mainly on business law and, in particular, corporate and mergers and acquisitions (M&A). It also addresses issues about economics, marketing, politics, current affairs and other legal systems different to the aforementioned.
Five (of ten) recommendations about insolvency law proposed by the UNCITRAL
UNCITRAL presented ten recommendations, which
are still being studied. Now we are going to see five of these ten
recommendations, probably the most important ones.
recommendation is focused on the director’s obligation, who have the obligation
to due regard to the interests of creditors and other stakeholders. The
obligation comprises: i) take reasonable steps to avoid insolvency and ii)
where insolvency is unavoidable, to minimize the extent of insolvency.
Lately, many countries are trying (and
achieving) to improve the regulation of the situation prior to insolvency. An
example of this is the spanish regulation, that in recent times approved important amendments
to the Insolvency Law 22/2003, these amendments regulate
schemes of arrangement and other matters.
With reasonable steps UNCITRAL means to:
ensuring they are fully informed about the affairs of the company, seeking
professional advice, ensuring of the assets of the company are protected and
permitting transactions that might be cancelled.
recommendation addresses the moment at which the obligation arises. The moment
have to be determined using the knowledge or the obligation to know that
insolvency is imminent or unavoidable.
recommendation is focused on the liability. The liability need to be applied
when the people obligated break their obligations and the creditors’ interests
have been harmed. Nowadays, the existence of damage is an important problem in
Spain, as the need to prove or not the culpability. The liability should be
limited to the extent to which the breach caused loss or damage.
Elements of liability and defences is the topic
in the fifth recommendation.
According to the UNCITRAL the insolvency law should specify the elements to be
provided in order to establish a breach of the obligations. The law may also
establish presumptions and permit shifts in the burden of proof to facilitate
the conduct of proceedings for breach of the obligations. These presumptions in
connection with the liability is one of the most important problems in Spain,
as we have seen above in recommendation number four.
Corporate and Mergers and Acquisitions (M&A) Lawyer at Fornesa Abogados, S.L.P. (Barcelona Bar Association - ICAB). Degree in Law awarded by Pompeu Fabra University (UPF), Master of Laws with honors at the Instituto Superior de Derecho y Economía (ISDE) and Master in International Business Law at ESADE. My main areas of practice are: M&A, corporate, venture capital, private equity, restructuring, and banking and finance. For more information and contact me click on my name. You can also find me on LinkedIn.