SPAIN Law and Practice Contributed by: Alfonso López-Ibor and Olivia López-Ibor, Lopez-Ibor Abogados
Insolvency proceedings may be requested by the insolvent company itself (voluntary insolvency pro - ceedings) or by a creditor (mandatory insolvency pro - ceedings). In the latter case, the corporate directors are usually removed and replaced by the insolvency administrator, who is always appointed by the court regardless of whether the insolvency proceedings are voluntary or necessary. 2.9.3 Co-Ordination, Recognition or Relief in Connection With Overseas Proceedings As an EU member country, the regulation contained in TRLC will be applied without prejudice to the provi - sions of Regulation (EU) 2015/848 of the Parliament and of the Council of 20 May 2015 on insolvency pro - ceedings. The TRLC prescribes the application of Spanish insol - vency law to insolvency proceedings initiated in Spain, based on jurisdictional rules that grant Spanish courts authority when the debtor’s centre of main interests is located within Spain. Should the debtor possess assets or rights overseas, it is permissible to seek the initiation of territorial pro - ceedings in the relevant foreign country. In such cas - es, the proceedings declared in Spain are considered the primary proceedings. Likewise, the TRLC establishes the requirements for a foreign resolution declaring insolvency proceedings to be recognised in Spain, necessitating adherence to the exequatur procedure regulated in Law 29/2015 of 30 July 2015 on international legal co-operation in civil matters. This stipulates that the foreign resolution must meet the following criteria: • that the resolution refers to collective proceedings based on the insolvency of the debtor, by virtue of which its assets and activities are subject to the control or supervision of a foreign court or authority for the purposes of its reorganisation or liquidation; • the judgment is final; • the jurisdiction of the court or authority that opened the insolvency proceedings is based on any of the criteria contained in this law or on a reasonable connection of an equivalent nature, and
mainly that the proceeding is initiated as a result of the debtor’s insolvency and not for other reasons; • the decision has not been rendered in the debtor’s absence or, if it was, it was preceded by a proper delivery or notification of a summons or equivalent document, allowing sufficient time for opposition; and • the decision is not contrary to Spanish public order. Regarding co-ordination principles, since they do not have the status of a law, Spanish judges could apply them as a way of facilitating the co-ordination of pro - cedures, but without any obligation to do so or any consequences for non-compliance. 2.9.4 Effect of Lessee’s Insolvency on a Deregistration Power of Attorney From the date the court declares insolvency proceed - ings, any powers of attorney granted by the lessee that allow the management of property will be invalid. This is because the insolvency administrator will now be responsible for managing the lessee’s assets and authorising any transactions that affect them. If the lessee, in addition to facing insolvency proceed - ings, is undergoing liquidation, the powers of attorney that allow the management of property will be revoked. This is because the insolvency administrator will now have exclusive control over the lessee’s assets and will be responsible for authorising any transactions that affect them. There is a risk that the IDERA would be re-character - ised under Spanish law as a deregistration power of attorney, in which case the IDERA would not survive the declaration of insolvency of the relevant lessee. Spain has not made any declaration in respect of Arti - cle XI of the Cape Town Treaty (Remedies on Insol - vency), which means that decisions on repossession and deregistration will be in the hands of the Spanish receiver and the insolvency judge. 2.9.5 Other Effects of a Lessee’s Insolvency All lease contracts are considered successive tract contracts, which means that these contracts can be terminated once the insolvency proceedings have been declared both for prior breaches (eg, non-pay -
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