Developments regarding pre-insolvency, the sale of business units and ICO-backed debt refinancing
The imminent aproval of the draf bill amending the Spanish Insolvency Act, which will probably take place in the following weeks, will bring about a complete overhaul of the Spanish insolvency system, particulary with regard to pre-insolvency instruments.
> In terms of pre-insolvency, it affords new debt restructuring opportunities, giving a more prominent role to creditors, who will be able to benefit from pre-insolvency instruments providing greater speed and flexibility, and offering a greater scope, as they allow the possibility of cramming down all classes of creditors, including the debtor’s shareholders.
> The reform lays down detailed provisions on preparing, in the pre-insolvency stage, the sale of business units whereby the court appoints an independent expert responsible for collecting potential purchase offers (known as “pre-pack”).
> It also introduces significant new developments concerning insolvency proceedings, including the removal of advance composition proposals and the acceptance of non-detrimental subordination agreements during the liquidation stage.
> It completes the procedure for the ICO (Spanish State Finance Agency)-backed debt refinancing.