New extension of the bankruptcy moratorium until December 31, 2021
On March 13, 2021, the Royal Decree-Law 5/2021 of March 12 (RDL 5/2021) which, among other measures, has approved a new bankruptcy moratorium in addition to those previously agreed to to try to alleviate the effects of the crisis caused by COVID-19 through Royal Decree-Law 16/2020, of April 28 (RDL 16/2020) and Law 3/2020, of September 18 (Law 3 /2020) with a time limit of December 31, 2020 and March 14, 2021, respectively.
With the new moratorium established in RDL 5/2021, companies and individuals that are in a situation of insolvency will not have to request their declaration of bankruptcy and/or liquidation until December 31, 2021 even if said insolvency situation is maintained during such period, not being able to admit during such period necessary bankruptcy requests requested by creditors. On January 1, 2022, if the company has not managed to remove its insolvency situation the obligation of the administrator to request the declaration of bankruptcy will arise, having a period of two months to do so. p>
This measure provides companies with an additional temporary margin to restore their equity balance and, in this way, address restructuring and/or refinancing processes without triggering the much feared bankruptcies and suspensions of payment (former name of bankruptcy, which includes both categories).
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Deadlines that we must take into account
Companies in bankruptcy agreement situation: possibility of counter-agreement.
All those companies that have obtained the approval of an Agreement in bankruptcy, an out-of-court payment agreement or a refinancing agreement will have the possibility of presenting a proposal to modify the same until December 31, 2021 (to modify or reach a refinancing agreement you will not have to wait for the course of the year from the previous approval provided for in article 617 TRLC).
Likewise, if the debtor is in breach of the Agreement and a creditor requests its declaration of non-compliance between October 31, 2020 and September 30, 2021, it will not be admitted to procedure until three months have elapsed from the last date indicated, period during which the bankrupt party may submit a proposal to modify the agreement or out-of-court payment agreement.
Pre-bankruptcy (out-of-court payment agreements and refinancing agreements).
On September 19, 2020, Law 3/2020 was published, in article 6.3 of which it was expressly established that all those debtors who had submitted a pre-bankruptcy communication Before December 31, 2020, they would be released from the obligation to submit their bankruptcy application during the following six months, thereby extending the three-month period provided for in article 588 TRLC. During said six-month period, the provisions contained in articles 588 and 589 TRLC on suspension and stoppage of singular executions would be applicable.
Since, subsequently and through RDL 5/2021 published on March 13, 2021, the bankruptcy moratorium is extended until December 31, 2021 without repealing article 6.3 Law 3 /2020 controversy has arisen, not yet resolved, among those who maintain that six months after the pre-bankruptcy communication submitted before December 31, 2020 the debtor must submit their bankruptcy application even though the expected moratorium in RDL 5/2021 remains in force and those who affirm that said interpretation is contrary to the spirit and purpose of the regulation, and the effects of the moratorium must be extended both to debtors who have submitted a pre-bankruptcy notice before December 31, 2020 and to those that don’t.
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For those who support this last position, that is, the applicability of the bankruptcy moratorium to all those debtors who have communicated their pre-bankruptcy, there is an additional question consisting of determining if the effects of the pre-contest (prohibition of initiation and stoppage of singular executions) would only remain in force during the 6 months provided for in Law 3/2020 or if, on the contrary, they would be extensible until the end of the bankruptcy moratorium.
The situation of uncertainty worsens if we consider what happens to all those debtors who chose (or will choose in the coming weeks and/or months) to notify their pre-bankruptcy< /em> after December 31, 2020 since no specific provision is contained in the regulations published to date. If we apply a criterion of prudence, it could be understood that the general provisions set forth in the Consolidated Text of the Bankruptcy Law will be applicable, for which reason such pre-bankruptcy proceedings will have a duration of three months plus one according to the provisions of art. 588 TRLC although, from a systematic point of view, said interpretation would be meaningless as it penalizes all those companies that, for whatever reason, could not or did not want to present their pre-competition notice for no justifiable reason. before December 31, 2020.
From JL.Casajuana Abogados, such as lawyers specializing in commercial and bankruptcy law, we can advise you on any matter relating to bankruptcy.
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