International insolvencies, challenges for the positioning of Spain as a bankruptcy jurisdiction

"The cycle, which takes place in three sessions between Barcelona and Madrid, aims to exhaustively analyze the most far-reaching changes that have been introduced in our regulations on international insolvency, assess their legal and economic relevance, try to resolve interpretative doubts that can be considered and weigh their incidence in order to reinforce Spain's position as a first level "bankruptcy jurisdiction".

May last 4 the cycle began International Insolvency, directed by Ivan Heredia Cervantes, Professor of Private International Law (UAM) and Associate at Garrigues. Academic Advisor of Fide.

The cycle, which takes place in three sessions between Barcelona and Madrid, aims to comprehensively analyze the major changes that have been introduced into our regulations on international insolvency, assess their legal and economic relevance, try to resolve any interpretative doubts that may arise and weigh their incidence with a view to reinforcing the Spain's position as a first level "bankruptcy jurisdiction".

  • The first session "Novelties in international insolvency after the reform of the TRLC", was held in Barcelona and was moderated by Alvaro Lobato Lavin, Mercantile Magistrate No. 2 of Barcelona. founding patron of Fide. He had the intervention of Iván Heredia Cervantes and Carlos Ara Triadú, Partner of Cuatrecasas. Its objective was to identify and discuss the main innovations that Law 16/2022 has introduced in the regulations on international insolvency.

The topics covered were very diverse. First, they analyzedThe regulatory changes that originate from the need to comply with the imperatives imposed by the EU Regulation on insolvency proceedings and, in particular, the new rules on control of international judicial jurisdiction.

Next, questions related to the recognition of foreign restructuring proceedings and it was concluded that Contrary to what seems to be deduced from the wording of the new article 753.2, the criterion to be taken into account when applying the rules on recognition of the TRLC is not that the foreign proceeding is based on the specific regulations on insolvency of the State of origin, but that it is processed within the framework of the insolvency of the debtor or to avoid it. Consequently, those foreign procedures that, for example, are regulated in corporate regulations, but meet the aforementioned requirements, should be recognized in Spain through the Consolidated Text. This means that, if the COMI of the debtor is not in the State of origin or, at least, said State does not have a reasonable connection with it of an equivalent nature, recognition should be denied.

The session continued with the analysis of the reform introduced in the conflicting regulations through article 754, by virtue of which, practically all exceptions to the application of Spanish law are eliminated as lex fori contest. In the debate, special attention was paid to the incidence of the new precept on the treatment of real guarantees over assets of the debtor located outside of Spain.

Finally, the last subject addressed, and which gave rise to an extensive dialogue with the attendees, was the game of new article 755 TRLC and its impact on the restructuring of international corporate groups. In particular, the advantages and limitations of the fact that it is applied in cases excluded outside the Insolvency Regulation were analyzed, as it requires that the communication or plan be requested from subsidiaries with COMI outside of Spain on a confidential basis, as well as as the incidence that the new precept can have in the presence of structures with double LuxCo.

  • The second session, which dealt with the Restructuring of Groups of international companies, was held on May 18 in Barcelona. Under the moderation of Iván Heredia, he intervened as a speaker Francisco Garcimartin Alferez, Professor of Private International Law, Autonomous University of Madrid. Linklaters Consultant and Academic Advisor to Fide

Through the analysis of a practical case, the session focused on the novelties in Restructuring of multinational groups of companies, a matter to which the reform devotes special attention and in which our legislator has distanced himself from European regulations. In this way, issues such as the content and potential of the new article 755 TRLC and the restructuring processes in which this precept has been applied to date the game in the international arena of the new rules on “third party release”, the specific problems raised by the transfer of partners of foreign companies or the relationship with future regulations on international structural modifications. During the session, special attention was also paid to those casos in which it has been decided to process parallel restructuring procedures in the United Kingdom and in Spain and the purpose pursued with this was discussed.

  • The third and last session of the cycle will take place next May 25 in Madrid to discuss the main challenges of international restructuring.

They will intervene as speakers Iván Heredia and Javier Yáñez, Partner of Uría Menéndez, moderated by Francisco Garcimartin. The session will present the content of the novelties introduced in the regulations on international insolvency as a step prior to identifying possible doubts about its interpretation. All of this with a clear objective: to discuss how to exploit the full potential of our revamped regulations in order to convert Spain in a jurisdiction of first level in the field of international insolvency. Registrations here

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