ANDORRA Law and Practice Contributed by: Miguel Cases, Marc Ambrós and Marta Felipó, Cases & Lacambra
into account, by effectively co-ordinating insolvency proceedings involving multiple jurisdictions. 1.2 Types of Insolvency Andorran law does not expressly distinguish between voluntary and involuntary insolvency proceedings. Nonetheless, any debtor unable to comply with its payment liabilities must file for insolvency before the Andorran courts. Additionally, creditors may request the pursuit of these proceedings and the Andorran court, of its own initiative, may also open an insol - vency judicial proceeding. An insolvency proceeding may be qualified either as a judicial restructuring or settlement proceeding ( arran- jament judicial ) or a bankruptcy proceeding ( fallida ), depending on whether the financial distress of the company can be reversed. 1.3 Statutory Officers The statutory officers in insolvency or restructuring proceedings are the following: • the competent supervisory judge, who supervises and decides on the operations and management of the procedure; • the administrators appointed by the court (one to three administrators can be appointed); and • the controllers (one to three controllers can be appointed), who are accounting experts and are chosen from the creditors. Their role is voluntary and non-remunerated. In all cases, the relatives of the debtor, up to the fourth degree of consanguinity or affinity, cannot be appoint - ed as administrators or controllers. A judge ( ponent del Tribunal de Batlles ) will be appointed as the person responsible for monitoring and deciding on the operations and management of the insolvency proceeding. The judge may freely appoint the administrators or controllers and may also remove them should they not accomplish their task. The insolvency administrator(s) will have the obliga - tion to inform the judge every three months on the
development of the viability of the debtor subject to judicial settlement or bankruptcy. The controllers will verify the accounts and assist the judge in the supervision of the operations of the insol - vency administrators. The controllers may also verify the status of the proceeding as well as the revenues obtained and the payments transferred.
2. Creditors 2.1 Types of Creditors
According to the insolvency rules and Andorran case law, a distinction is made between special privileges ( privilegis especials ) and general privileges ( privilegis generals ) over movable assets ( béns mobles ) and real estate assets ( béns immobles ). Consequently, creditors are to be paid in the follow - ing order. • Creditors granted a special privilege over mov - able assets (pledges along with bonds and certain specific privileges, such as those afforded to the sellers of movable assets). • Creditors granted a special privilege over real estate assets (mortgages and concrete privileges, such as those in favour of architects, real estate asset sellers and real estate asset acquirers to recover the price paid plus legal interests on the termination of the sale agreement). • Creditors granted a general privilege (such as the privilege provided to workers for their salary amounts). • The rest of the creditors, pro rata of their respec - tive credits upon verification and admission by the insolvency administration. Concerning special privileges (claims secured by means of mortgages, pledges, bonds or any other special privilege over movable or real estate assets), creditors are favoured with a segregated enforcement right, which allows the enforcement of the specific guarantee on the creditor’s own benefit regardless of the development of the insolvency proceeding(s).
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