If your company is facing insolvency, you may be interested in express bankruptcy proceedings in Spain. This procedure offers you a quicker, cheaper and safer way of liquidating your assets than the usual proceedings. The article explains why.
Did you know? Costaluz Lawyers offer full support for businesses facing bankruptcy in Spain. Find out how we can help yours.
What are express bankruptcy proceedings?
This legal figure allows a privileged escape route for companies facing normal bankruptcy proceedings and that have neither capital nor liquid assets to take on the process.
What are the advantages of express bankruptcy proceedings in Spain?
This procedure allows a company to dissolve and liquidate more quickly, cheaply and safely.
Why is it quicker than regular bankruptcy proceedings?
The express process includes fewer phases than usual and can generally be completed in a single court sitting. As a result, proceedings can be completed in two to three months (depending on the court’s workload). This reduces the usual timescale by a quarter.
Why are express bankruptcy proceedings in Spain much cheaper?
Because it is a simpler process, fewer professionals are involved. For example, there is no need to appoint a bankruptcy administrator. And those who do intervene spend around a quarter of the time spent in regular bankruptcy proceedings. Consequently, the process is up to a third cheaper.
Did you know? Spanish law allows companies facing bankruptcy a second chance.
Why is it safer?
The express bankruptcy proceedings avoid the qualification phase (see below) and so debtors choosing this route free themselves from eventual bankruptcy responsibility. The suppression of the qualification phase means you must prove that there is no evidence of your guilt. However, avoiding it can have significant benefits for debtors who have been part of the company’s insolvency or the cause behind it.
What is the qualification phase?
This is the part of the bankruptcy proceedings that examines the causes of insolvency to determine whether the debtor is guilty. Where appropriate, it also looks at the liabilities and pinpoints the responsible parties.
What requirements must be met to qualify for express bankruptcy proceedings?
There are two main requirements:
- The company must be unable to pay the expenses of the bankruptcy procedure because of lack of resources of assets.
- There must be no evidence of actions for reimbursement, challenge and liability by third parties that could eventually put the company’s financial state in order.
Are there any risks involved in these proceedings?
As with anything to do with insolvency, you should get expert legal advice to ensure your company meets all the requirements and that express bankruptcy proceedings are right for your business. You should pay special attention to:
- Ensuring the company does not have enough resources to satisfy its debts.
- Making sure there is absolutely no possibility of actions to reimburse creditors or that may imply the responsibility of third parties.
- Providing all the required documentation and information to demonstrate that your company’s situation of insolvency is true. This includes proving that it does not have sufficient assets to satisfy debts or the money to meet the expenses generated by an ordinary bankruptcy process.
How can I get professional help?
Providing businesses with expert advice with insolvency in Spain forms one of the pillars of the company services we provide at Costaluz Lawyers.
Our experienced team will help you find the best solution (quickest, cheapest and safest) for your company when facing bankruptcy. Get in touch to find out how we can help you now.