Company Restructuring

Two years after the entry into force of Act 16/2022, of September 5, amending the consolidated text of the Insolvency Act, it is time to reanalyze the evolution of the practical application of the new pre-insolvency restructuring plans. Last year, we had the opportunity to publish the Guide | Assessment of the first year of implementation of the Spanish insolvency reform (November 2023), with a detailed study of judicial decisions on the main restructurings carried out in Spain.

This year, it is appropriate to continue and update the analysis, which offers different points of interest due to the increased technical complexity of the practice and the greater experience of all participants (advisors, doctrine, judges). Thus, in this Guide presents our assessment of the second year of implementation, with the aim of gathering the main experiences that generate value for the specialist in the field and being, therefore, an essential approach to the state of the art for the scholar and the practitioner. We have gathered the most relevant and valuable experiences for experts in the field with the aim of providing a state-of-the-art overview for scholars and professionals. We have analyzed over 50 restructurings, focusing on the judicial decisions and selecting the most pertinent matters to further explore and understand this field.

Our main conclusions are the following:

• - Greater judicial scrutiny.
• - Restructuring plans are still predominantly triggered by current or imminent insolvency.
• - Practical experience does not allow a clear pattern to be established as to the notification of the opening of negotiations and situations of insolvency.
• - Creditor applications have not become the norm. It is normally the debtor who files the restructuring plan.
• - Non-consensual plans represent three quarters of the cases analyzed, which is a change in trend compared to the previous year.
• - The perimeter of claims affected by the restructuring is a major issue in judicial decisions.
• - Class formation is still a central element of restructuring plans and has been questioned in almost all litigation processes.
• - Restructuring experts have played a dominant role.
• - Debt-equity swap has not been common.
• - Interim and new financing have played a prominent role, particularly because of their inclusion among the affected claims.
• - Litigation over restructuring plans has increased.

In line with Cuatrecasas’s solid commitment to knowledge dissemination, we hope this Guide will be beneficial to all its recipients, making the technical excellence of our team of lawyers specializing in Restructuring, Insolvency and Special Situations available to the interested public. We will continue to publicly share the in-depth study of pre-insolvency situations and the evolution of the practice.