Description Of The Spanish Bankruptcy Law-00-6453

By Author: rafalinares
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The Spanish system, inspired in the social and political ideas of the liberalism of the
Nineteenth century, is presided by the principle that insolvency procedures should
Serve as a way to support the market tell apart and eliminate all those individual and
Entities who have failed in their business activities. Our insolvency law is founded on
The belief that the market had better be given tools to self-regulate and depurate. The
Priorities are accordingly:

I) the shelter of the safety of business transactions,
Ii) the preservation of the debtor's estate, as a way to enable creditors to recover their receivable to the greatest extent possible, and (iii) to ascertain that all creditors are given equivalent treatment - pursuant to the rule known as par conditio creditorum (with the exception of the legal privileges and predilections).

Thus, it may be said that there is small or no concern in our legislation in regards to
Eliminating restrictions for the insolvent debtor to resume its previous business
Actions or to start out new ones.

A clear distinction may ...
... be made, notwithstanding, amid the suspension of payments
(temporary insolvency, in principle) and bankruptcy (terminal insolvency, in
Principle).

In suspension of payments procedures, the debtor is only subject to the approval and
Control of its activities by the supervising auditors appointed by the judge, so that
Every dealing involving payment of debts, collection of credits or the undertaking
Of liabilities should be approved by said supervising auditors. The above mentioned
Nonetheless, the debtor maintains its legal right to manage and behavior the
Business (accept when the insolvency is subsequently classified as a terminal one,
Then the judge may impose restrictions on the debtor's management faculties).

Then again, in bankruptcy procedures, the declaration of bankruptcy entails, as
An auto consequence, the prohibition of the debtor to administer its summations. The
Management faculties of the debtor are assumed by the receivers that are going to be
Appointed amid the creditors5. The debtor may not be subsequently rehabilitated
Until the termination of the proceedings (provided that certain circumstances are
Met), unless a composition with the creditors in particular allows him/her to resume
Business (this would only be relevant in the bankruptcy of companies7).

This difference amid the personal aftermaths suffered by the debtor in
Suspension of payments and bankruptcy procedures results in practice in an overuse of
The suspension of payments process for cases of terminal insolvency. Debtors try to
Benefit from the unclear legal limits amid the goal to be attained definition of suspension of
Payments and bankruptcy cases. Thus, some of the petitions for suspension of
Payments correspond in truth to cases of terminal insolvency.

According to the rules governing the suspension of payments process, when the
Judge declares (based on the report of the supervising auditors) that the debtor's
Insolvency should be regarded as a terminal one, some of the legal provisions
Governing bankruptcy cases become relevant to the suspension of payments
(possibleness of taking nullifying activities against certain transactions prior to the
Petition for suspension of payments; examination of the debtor's liability for the
Terminal insolvency; possibleness of imposing further and added restrictions on the debtor's
Managing faculties). Nonetheless, even in situations of terminal insolvency, the debtor in
Suspension of payments will not be disqualified for conducting business.

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http://www.articulo.org/articulo/16591/agilizar_el_concurso_de_acreedores_una_necesidad_imperiosa.html // http://www.articuloz.com/economia-articulos/el-vicepresidente-del-cgpj-pide-la-resolucion-del-concurso-de-acreedores-en-un-mes-2408211.html