ANDORRA Law and Practice Contributed by: Miguel Cases, Marc Ambrós and Marta Felipó, Cases & Lacambra
7.4 Other Consequences for Directors and Officers A director of a legal entity may be personally punished for committing criminal bankruptcy when, knowing that they are unable to liquidate its debts, they: • falsify the balance sheet in order to complicate the verification of the assets; • divert assets intended for the creditors, for their own benefit; • give away, destroy or deteriorate assets that could have been for the creditors; • dispose of assets or securities of the company or their own at a price lower than that established at the time in the market; or • destroy, damage, conceal or falsify the commercial books in order to make it impossible or difficult to verify the outstanding credits. 8. Setting Aside or Annulling a Transaction 8.1 Circumstances for Setting Aside a Transaction or Transfer Under the claw-back regime established in the Insol - vency Decree, the judge is entitled to set aside any
transactions entered into by the debtor within the 18 months prior to the initiation of the insolvency pro - cedure that are considered to be prejudicial to the borrower’s insolvency estate, and that fulfil any of the following requirements: • acts of disposal for free and agreements where the debtor’s obligations significantly exceed those of the other party; • all payments for debts not due on the date of insol - vency; or • any mortgage or security over the debtor’s assets constituted after the date of insolvency for prior debts. Additionally, the judge may order the setting aside of gratuitous acts, carried out during the six months pre - ceding the date of insolvency. 8.2 Claims to Set Aside or Annul a Transaction or a Transfer The judicial administration as well as all individual creditors can directly assert their claims to set aside or annul transactions by means of a civil proceeding substantiated before the same judge in charge of the insolvency procedure.
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