Yesterday the Council of Ministers approved the Royal Decree – Law 16/2020 of 28 April, of procedural and organizational measures to deal with COVID-19 in the field of the Administration of Justice.
What are these measures intended to do??
These measures are intended to be a shock plan to try to speed up the accumulation of suspended procedures once the state of alarm situation is lifted.. In this sense, the month of August is enabled, and also the afternoons, for trials.
Besides, in view of the forecast of an increase in companies that enter into bankruptcy due to the crisis, The Royal Decree – Law has made bankruptcy deadlines and procedures more flexible aimed at avoiding the liquidation of companies. As explained in the Royal Decree – Law, The intention is to prevent companies that could be viable, are liquidated due to the current situation, destroying jobs and affecting the productive fabric.
Regarding the expansion of the deadlines, The debtor who is in a state of insolvency will not have the duty to request the declaration of bankruptcy until the 31 December of 2020.
Besides, it is expected that, for the purposes of the legal cause of dissolution due to losses, those of the year are not computed 2020. If the result of the exercise 2021 they leave the net worth reduced to an amount less than half of the share capital, must be called by the administrators or may be requested by any partner within a period of two months from the close of the financial year..
It also modifies the agreement bankruptcy: during the year following the declaration of the state of alarm, The bankrupt may submit a proposal to modify the agreement that is in the compliance period., or during the three months that follow any requests for a declaration of breach of the agreement that are presented by the creditors
In case of liquidation, during a period of one year from the declaration of the state of alarm, The debtor will not have the duty to request the liquidation of the assets when he knows of the impossibility of complying with the obligations contracted after the approval of the bankruptcy agreement., provided that the debtor presents a proposal to modify the agreement and it is accepted for processing within said period.
Regarding the refinancing agreements, during a period of one year from the declaration of the state of alarm, The debtor who has had a refinancing agreement approved may inform the court that he has initiated or intends to initiate negotiations with creditors to modify or renew the agreement in force even if a year has not passed since the previous request for approval.. In addition, during the six months following the end of the state of alarm, The judge will inform the debtor of the requests for declaration of non-compliance with the refinancing agreement presented by the creditors, but it will not admit them for processing if one month passes from the end of said six-month period.; In that month the debtor may inform the judge that he has started or intends to start negotiations with creditors.
As usual, from Vázquez and Manchón We are committed to keeping you informed of the latest legal and fiscal developments that occur to alleviate the effects of the COVID-19 crisis..
