19 may 2016

Up to 17 modifications since 2011. The Law 22/2003, 9 July, Insolvency, has been modified several times during the last years, an apparently endless tendency according to the insolvency administrators’ vindications, demanding the next Executive to accept negotiations about a flexibilization of the last modifications of the   Law,   introduced by the Law 40/2015 of the Public Sector affecting their remuneration.

‘Some unsatisfied insolvency administrator, as well as the media, have created the false myths chasing us’, says Diego Comendador, Vice-President of the Asociación Profesional de Administradores Concursales (ASPAC). Myths such as they agree with judges their appointment or that they receive excessive fees.

With each modification new procedures, not contemplated in the former laws, have been introduced; such as the case of the out-of-court payment agreements, improvements in the summary procedure, or the ones related to the insolvency administrator figure and its functions. In chronological order the last reforms have been:

Law 38/2011, 10 October, on the reform of the Law 22/2003, 9 July, Insolvency, modifying the composition of the insolvency administration and introducing the article 176bis relating the conclusion for lack of assets.

Law 14/2003, 27 September, supporting entrepreneurs and their internationalisation, that introduced the Title X of the Insolvency Law related to the out-of-court payment agreements.

Law 25/2015, 28 July, of the second-chance mechanism, reduction of financial burdens and other social measures, introduced by the article 178bis related to the dissatisfied liability exemption.

Law 40/2015, 1 October, creating the tax escrow account that allows controlling the payments corresponding to insolvency administrators.

Arrangements with creditors in Spain are above the 5000 per year since 2009

New modifications

With the  adoption of the Regulation about the Statute of the Insolvency Administration will come into force the tax escrow account, to which insolvency administrators will gave to contribute with a 2,5%, 5% or 10% of their salary, depending on the amount. The objective of this redistributive measure is that insolvency administrators of the most profitable insolvency states finance the others. Comendador thinks that this initiative is ‘illusory’, since ‘we should pay 2000 arrangements without compensation with the remuneration of the other 3000 that do have a compensation’.

The currently in force reform  is the limitation of the remunerations of insolvency administrators, who will not receive more than the 4% of the amount or more that 1,5 million euro. Also, judges will be in charge of revising upwards the 50% of their salaries in each arrangement.

Arrangements with creditors in Spain are above the 5000 per year since 2009, reaching the 9143 in 2013. The greatest part affected companies and and a lower percentage affected  natural persons without business activity. In the past were 4916 arrangements with creditors in our country.

Image source: cincodias.com