New refinancing agreements protected without collective approval by the creditors

The Spanish Insolvency Law 22/2003 has been amended by the Royal Decree-Law 4/2014 (RD-Law). This RD-Law introduces very important innovations, and here we want to remark a new kind of refinancing agreements that not require a previous collective approval to be immune to claw back actions.

Therefore, the particularity is that this type of agreement requires no approval by creditors or judicial approval.

In fact, its application depends on very strict requirements, because if the agreements do not improve the equity (financials of the company) cannot be protected.

This kind of refinancing agreements require the following cumulative conditions:
  1. Increase the proportion of assets over liabilities;
  2. Resulting value of current assets is equal to or greater than current liabilities (short term liabilities);
  3. Resulting value of security granted in favour of the creditors involved by the agreement does not exceed  either 9/10 of the value of the outstanding debt owed to such creditors, or the proportion of the outstanding  debt guarantees they had before the agreement;
  4. The interest debt applicable in favour of the creditors affected by the agreement does not exceed 1/3 of the applicable to previous debt; and
  5. The agreement is granted by a Notary Public, signed by all the creditors affected and the debtor, and also states the economic reasons justifying the agreement. 
These conditions should be given at the time of execution of the public instrument. And, as we all can see, these conditions are not easy to meet.

No hay comentarios:

Publicar un comentario en la entrada

Les entrades publicades són escrits no exhaustius elaborats en temps lliure i de forma personal, sense cap tipus de relació amb les empreses per les que pugui prestar serveis. Al ser continguts de caràcter general i no exhaustius no poden constituir assessorament legal.

Las entradas publicadas son escritos no exhaustivos elaborados en tiempo libre y de forma personal, sin relación con ninguna empresa en la que pueda prestar servicios. Al ser contenidos de carácter general y no exhaustivos no pueden constituir asesoramiento legal.

The entries published here are not thorough investigations. They are made on my own during my free time, without relation to the companies where I could provide services. These contents are general and not exhaustive, for this reason cannot constitute legal advice.