Report on the Draft Reform of the Bankruptcy Law

• It favors the refinancing of companies and pre-bankruptcy agreements, and reconciles the satisfaction of creditors with the recovery of the business solvency situation.
• It will allow the debtor to find solutions outside the bankruptcy process and decongest the commercial courts.
• Greater powers are granted to bankruptcy administrators, consequently requiring greater responsibility from them, all to ensure business viability or, where appropriate, the quickest solution to the bankruptcy process.

The Council of Ministers has received a report from the Minister of Justice on the Draft Law to reform the Bankruptcy Law, continuation of the one carried out through the Royal Decree-Law on urgent measures in tax, financial and bankruptcy matters, of March 27, 2009.

After the approval of this rule, in order to carry out a more profound and balanced reform of the Bankruptcy Law, a Special Section of the General Codification Commission was established, made up of seventeen experts from different legal and economic professional backgrounds. The proposal of this Special Section constitutes the basis of what is presented today as the Draft Law to reform the Bankruptcy Law.

The Preliminary Project, based on the maintenance of the essential principles of the current Law, proposes to normalize the role of the competition and to constitute it as an instrument at the service of the viability of companies and not only as a formula for their liquidation when they run into difficulties. .

The reform goes deeper into the line of simplification, streamlining and lowering the cost of the competition process.

Among the most relevant aspects of the proposed reforms are:

• The establishment of alternatives to the contest.
• The development of the abbreviated or simplified procedure.
• The bankruptcy administration.
• Reforms in labor matters.