SPAIN Law and Practice Contributed by: Antonio Paredes, Carlos Saldaña, Manuel Martínez and Román Mejías, ZADAL
available, is generally faster but still requires statutory notice and valuation steps. Typical costs include court fees, notarial and registry charges, valuation expens - es and, where relevant, restructuring or insolvency- related costs; these can be reduced through clear acceleration/enforcement drafting, timely perfection and registration, and use of streamlined non-judicial mechanisms when legally available. 6.6 Practical Considerations/Limitations on Enforcement Enforcement: Predictability and Practical Approach In Spain, the decision to enforce is usually driven more by commercial strategy than by legal uncertainty, as the secured enforcement framework is generally well established and outcomes are relatively predictable. Real estate enforcement can be slow, but procedures, priority rules, valuation steps and insolvency-related stays are clearly defined, and disputes typically focus on process rather than the underlying right to enforce; recent insolvency reforms have also improved co- ordination between enforcement and restructuring, helping to reduce value-destructive outcomes. Private credit lenders often mitigate practical con - straints through structuring rather than asset-by-asset enforcement, frequently relying on share pledges at holding level and security over bank accounts and receivables to pursue control-based solutions that preserve enterprise value. Clear contractual protec - tions – especially robust acceleration provisions and well-built intercreditor arrangements – further support execution certainty and co-ordinated enforcement across the creditor group.
may result in a composition agreement or liquidation. Debtors can also make pre-insolvency filings to obtain temporary protection while negotiations take place. Effect on Enforcement and Control Commencing a restructuring or insolvency process generally limits individual enforcement, with restructur - ing plans and pre-insolvency filings typically triggering stays to preserve value, although secured creditors may sometimes proceed if collateral is non-essential or adequate protection is lacking. In a concurso , enforcement over assets necessary for the business is usually stayed, while non-essential collateral may be enforced subject to court oversight. Control also differs: under restructuring plans the debtor remains in possession, whereas in a concurso the debtor is usu- ally supervised by an insolvency administrator in the common phase and, if liquidation is opened, manage - ment is displaced and the administrator takes control of asset realisation and distributions under statutory priority rules. 7.2 Waterfall of Payments Statutory Waterfall in Insolvency Under Spanish insolvency law, distributions follow a statutory priority order. Claims against the estate are paid first as they fall due (including post-filing costs, insolvency administrator fees and certain post- commencement employment obligations), followed by privileged claims (including secured claims paid from their collateral and certain labour and public law claims). Ordinary unsecured claims are paid next, and subordinated claims (eg, related-party debt, late-filed claims and post-petition interest) rank last and are only paid if higher-ranking claims are satisfied. Practical Restructuring Dynamics In practice, restructurings and going-concern solu - tions can deviate from strict ranking for value-preser - vation reasons. Employee-related amounts are often paid or assumed to maintain workforce continuity, and critical suppliers or key counterparties may also be supported where necessary to keep operations run - ning and maximise overall recoveries for the estate.
7. Bankruptcy and Insolvency 7.1 Impact of Insolvency Processes Available In-Court Processes
Spanish law provides several court-based restruc - turing and insolvency routes under the Insolvency Act. The main tools are court-approved restructuring plans ( planes de reestructuración ), which can be used pre-insolvency or in early insolvency and may bind dissenting creditors across classes, and formal insol - vency proceedings ( concurso de acreedores ), which
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