This reform aims to introduce further reforms in the insolvency environment in order to provide effective tools to improve insolvency procedures and make it easier for a company to survive and avoid insolvency.
A new single insolvency procedure is introduced for micro-enterprises with up to 10 employees and the self-employed, in order to give continuity to viable companies. The insolvency process is simplified and possible routes are offered for drawing up a continuation plan in the event of an agreement or orderly liquidation.
A paradigm shift
For experts, the entry into force of the law transposing the Restructuring and Insolvency Directive "will change the paradigm of insolvency proceedings as we know it". With the entry into force of the new law, significant advantages are introduced for the restructuring of viable companies.
The bankruptcy moratorium has been in force since 17 March 2020 and, after numerous extensions, 27 months have passed in which debtors were not legally required to file for bankruptcy.
The so-called insolvency moratorium has been in force since 17 March 2020, after successive extensions, and in total there have been just over 27 months in which debtors have not been legally obliged to file for insolvency proceedings.
According to another expert, debtors should already have a roadmap, as should creditors, who could be encouraged to wait for the entry into force of the Draft Law, taking advantage of the flexibility of the new Restructuring Plans. For the expert, it is important to underline that "among the main novelties of this bill is the possibility of dragging partners in certain cases".
An additional measure is the possibility of exoneration without prior liquidation of the debtor's assets and a payment plan for creditors, allowing the debtor to maintain his or her habitual residence and, if self-employed, to continue his or her activity.
It is also possible to extend payments to five years as long as the debtor's habitual residence is not disposed of. The list of exonerable debts, the amounts of exonerable public credit and certain restrictions on eligibility for exemptions have been extended.
The end of the bankruptcy moratorium and its consequences
Following the end of the moratorium, the suspensive effects established during the pandemic and also those relating to the application of the provisions of Article 5 of the TRLCwhich lays down the obligation to submit a tender.
It is considered that an avalanche of insolvency proceedings may be "foreseeable" in the coming months. However, "this perception of urgency does not seem to be widely perceived at a social level, so we will have to wait to see if this forecast of an avalanche is realised or not. The conclusion of the grace periods for loans and credits guaranteed by the ICO, "may have a greater impact on insolvency than the conclusion of the moratorium itself".
Confijulab and insolvency law