Emergency COVID-19 Legislation in the Area of Insolvency and Restructuring Law

Madaus, Stephan; Arias, Franchesca

doi:10.1515/ecfr-2020-0018

Cited by 3 publications

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“…Thus, in countries, a number (the USA, Singapore) the rules on thresholds of creditors' consent for the procedures introduction and financial reorganisation plan approval were revised or abolished. Improving the effectiveness of rehabilitation procedures is based on providing debtors with some of the advantages (especially in terms of flexibility and minimal court involvement) [9].…”

Section: Improvement Rehabilitation Procedures Effectivenessmentioning

confidence: 99%

Insolvency Law Adaptation to the Covid-19 New Challenges: the Process of Destigmatisation and the Focus on the Rehabilitation of Business

2021

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The institution of insolvency (bankruptcy) occupies a special place in the state institutions system to support business entities in the recovery process from the crisis, given the selection mechanisms and rehabilitation opportunities inherent in it. Bankruptcy on the global economy scale serves as one of the anti-crisis regulation tools to improve financial and economic stability. The Covid-19 pandemic has actualised the ensuring the bankruptcy law institutional capacity problem by maximising its anti-crisis potential. Given its spread scale, the insolvency law adaptation to the Covid-19 new challenges is a challenge faced by all legal systems without exception. The findings of this study reveal that fragmented and uncoordinated national responses have common trends caused by the unity goal of minimising economically and financially destructive effects of the pandemic. This study objective was to identify the most effective strategy for the bankruptcy institute modernisation, which solution is based on the elements comparative analysis and convergence methods. In conclusion, the bankruptcy institute development basic tendencies and patterns have been revealed. Their analysis has allowed designating the legislation perfection most effective and perspective strategies in this sphere, which are determined by the course to aim at its anti-crisis potential development.

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Section: Improvement Rehabilitation Procedures Effectivenessmentioning

confidence: 99%

Insolvency Law Adaptation to the Covid-19 New Challenges: the Process of Destigmatisation and the Focus on the Rehabilitation of Business

2021

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“… 1 Garcimartín ( 2020 ); Madaus and Arias ( 2020 ), p 321. Spanish insolvency legislation includes regulation regarding preventive restructuring frameworks and for traditional bankruptcy proceedings.…”

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confidence: 99%

Corporate Restructuring Laws Under Stress. The Case of Spain

Bermejo

2023

Eur Bus Org Law Rev

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This paper offers some reflections on the effectiveness of the insolvency law measures adopted in Spain during the Covid crisis and on the provision of public funding during this crisis and the repayment of the corresponding claims. The analysis shows that the insolvency measures were inherently ill-suited for achieving the policy goal of preserving businesses, and that there was a good case for the provision of public funding. However, in the Spanish case this funding came too late, and there are now significant challenges associated with restructuring these funds where they were extended by way of loan or guarantee rather than as grant. With regard to the recovery of these funds, the paper concludes that there are no good reasons to insulate the State from the restructuring of debtors’ liabilities in the context of a crisis with the characteristics of the pandemic crisis. On the contrary, credit risk should also be transferred to the State—as to other creditors—, and the State will then have to assume the role of loss absorber of last resort.

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“…It is noteworthy that, unlike in Germany, the suspension of the duty to file is not expressly limited to situations of insolvency deriving from the COVID crisis. For a comparative overview of the German and Spanish COVID-related reforms, with critical considerations, see Madaus and Arias ( 2020 ).…”

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confidence: 99%

Corporate Restructuring Laws Under Stress: The Case of Spain

Tirado

2023

Eur Bus Org Law Rev

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The COVID-19 crisis caused an unprecedented global disruption of economic activity, which was especially intense in Spain due to the nature of its economy. Many legal and institutional reforms were adopted, and extraordinary economic measures implemented. As interim reforms are lifted and economic incentives wear off, Spain will need to grapple with the economic damage caused by the pandemic. Arguably, the reform of the insolvency system recently approved, which precedes and is independent of the measures enacted to stave off risks caused by the pandemic, provides an enhanced and improved framework to deal with business insolvency. Spain now counts on a state-of-the-art hybrid restructuring system and a modern regulation to deal with the financial and economic distress of micro enterprises. However, the special legislation approved during COVID, and the side effects of the economic measures came with a cost and are already interfering with the day-to-day application of the new insolvency system, especially concerning public claims and public guarantees. Further, the Spanish legal framework has still some shortcomings which might prove a real hindrance to resuming access to credit at adequate levels.

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Emergency COVID-19 Legislation in the Area of Insolvency and Restructuring Law

Cited by 3 publications

References 0 publications

Insolvency Law Adaptation to the Covid-19 New Challenges: the Process of Destigmatisation and the Focus on the Rehabilitation of Business

Insolvency Law Adaptation to the Covid-19 New Challenges: the Process of Destigmatisation and the Focus on the Rehabilitation of Business

Corporate Restructuring Laws Under Stress. The Case of Spain

Corporate Restructuring Laws Under Stress: The Case of Spain

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