SPAIN Law and Practice Contributed by: Ángel Pérez López, Luis Jiménez and Rodrigo del Saz, Uría Menéndez
• a mortgage foreclosure proceeding ( juicio hipotecario ). In addition, if established in the public deed of mortgage, the creditor is entitled to seek recourse in out-of-court notarial proceedings ( procedimiento notarial extra-judicial ). Enforcement proceedings of financial collat- eral arrangements may neither be affected nor stayed by the debtor’s declaration of insolvency as provided for in Law 16/2022. In the authors’ experience, it is common to dis- cuss in the security agreements whether the mere occurrence of an event of default is suf- ficient grounds to initiate the enforcement or whether the loan agreement is required to be accelerated in order for the lenders to be entitled to enforce the security. Although there is no general rule, acceleration may be acceptable for security interests such as the pledge over shares or real estate mort- gages over key assets; however, pledges over bank accounts or receivables should be enforce- able upon the occurrence of a payment event of default since the type of pledged asset allows for a partial enforcement.
the bidco and/or the Target under the financing documents. A personal guarantee ( fianza ) may be created by an agreement between the creditor and the guarantor or by operation of law. In order to facilitate enforcement of a personal guarantee against a Spanish company, personal guaran- tees are usually documented in notarial deeds where the guaranteed amount is clearly stated or, at least, it can be clearly determined (by reference to the guaranteed obligation). In this regard, a liquidation clause ( pacto de liquidación ) that establishes a procedure for calculating the outstanding debt is usually included in financing agreements. The inclusion of a liquidation clause can afford access to the secured party to expe- dited enforcement proceedings. Without such a clause, declaratory court proceedings must ini- tiated in order to determine the amount owed, leading to delays in enforcement. Under Spanish law, a guarantor cannot be obliged to pay the beneficiary of the guarantee until all the assets of the debtor have been real - ised ( beneficio de excusión ). This benefit for the guarantor does not apply in the following cases: • if the guarantor has waived the benefit; • if the guarantee is joint and several (as is usu- ally the case in acquisition finance transac- tions); • if the debtor becomes insolvent or bankrupt; or • if the debtor cannot be sued in Spain. Additionally, a guarantor may raise against the creditor all the exceptions and defences corre- sponding to the debtor and that are inherent to the debt.
6. Guarantees 6.1 Types of Guarantees
The SPV, the Target and each of its material subsidiaries will usually provide, to the extent permitted by Spanish law (specifically, the financial assistance prohibition and conflict-of- interest restrictions), a first-demand guarantee or other type of personal guarantee in respect of the fulfilment of the obligations assumed by
450 CHAMBERS.COM
Powered by FlippingBook