ANDORRA Law and Practice Contributed by: Miguel Cases, Marc Ambrós and Marta Felipó, Cases & Lacambra
4.4 The Position of the Debtor in Restructuring, Rehabilitation and Reorganisation
the income obtained and the deliveries that have been made. Their role is not remunerated. From the moment the bankruptcy is declared, the debtor is deprived of the ability to administer and dis - pose of their assets. The debtor’s rights and actions, concerning their assets, are exercised during the time of bankruptcy, by the administrators. 4.6 The Position of Shareholders and Creditors in Restructuring, Rehabilitation and Reorganisation The involvement and position of shareholders in a restructuring procedure is not provided for in the law. Creditors actively participate in the procedure, as the proposed restructuring agreement will be deemed accepted when it obtains the favourable vote of creditors, whose credits add up to three-fifths of the debtor’s liabilities, after the credits of those who had exercised their right to abstain (those privileged by real guarantee or surety or personal work) have been deducted. In the event of a restructuring procedure of an entity foreseen in the Banking Recovery Act, the sharehold - ers must bear the losses, debts and costs in the first place. 5. Statutory Insolvency and Liquidation Procedures 5.1 The Different Types of Liquidation Procedure The initiation of the liquidation procedure is specifi - cally applicable to corporate entities and it is primarily triggered by: • the dissolution of the company, whether by legal grounds or under its articles of association (among others, when the company’s inability to meet its financial obligations or when the duration period for which the company was incorporated expires); or • the termination of an insolvency procedure. The insolvency procedure is identical to the restructur - ing procedure (see 4. Statutory Restructuring, Rehabilitation and Reorganisation Proceedings )
In a restructuring process, the debtor must be assisted by the administrator to perform any activities concern - ing the administration and disposal of their assets. If the debtor refuses to execute a decision that is neces - sary to safeguard their assets, the administrator may proceed as they deem most appropriate, after having been authorised to do so by the judge in charge of the proceeding. They may also request the judge’s authorisation to adopt precautionary measures aimed at collecting receivables or carrying out acts neces - sary to protect the debtor’s assets. The debtor’s activities and, in particular, the operation of the business or company, may continue if author - ised by the judge in charge of the procedure, as long as they deem it appropriate. They may also revoke this authorisation if necessary. The administrator must notify the judge of the results of the debtor’s activities and the development of the business or company at least every three months, on the last business day. The bankruptcy administrator must liquidate the debtor’s assets under the best possible conditions, acting with the utmost diligence. They therefore have the broadest powers to collect credits and sell the debtor’s goods and movable effects. The sales must be made by public auction. The administrator may exercise the judicial actions that are necessary to achieve the appropriate liqui - dation of the debtor’s assets and may also agree or compromise on assets and rights belonging to the debtor, with the authorisation of the judge in charge of the bankruptcy process. 4.5 The Position of Office Holders in Restructuring, Rehabilitation and Reorganisation Controllers must be experts in accounting and may be chosen from among the creditors of the bankruptcy process. Their tasks consist of verifying the account - ing and assisting the judge in monitoring the work of the administrators. They may at any time request that they be given accounts of the state of the procedure,
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