Analysis of insolvency proceedings in Spain against the backdrop of the COVID-19 crisis: insolvency proceedings, pre-insolvency arrangements and the insolvency moratorium

Series: Occasional Papers. 2029.

Author: Miguel García-Posada Gómez.

Full document

Analysis of insolvency proceedings in Spain against the backdrop of the COVID-19 crisis: insolvency proceedings, pre-insolvency arrangements and the insolvency moratorium (579 KB)

Abstract

The inefficiency of Spanish insolvency proceedings – evidenced by their length and reflected
in the fact that non-financial corporations and sole proprietors make limited use of both
insolvency proceedings and pre-insolvency arrangements – is a structural shortcoming of
the Spanish economy. It is a problem that has become particularly important against the
backdrop of the COVID-19 crisis and the severe impact it is having on the financial situation
of Spanish firms, despite the broad range of public measures introduced to mitigate it. This
document analyses the functioning of the insolvency system, examines the pros and cons
of the insolvency moratorium currently in place and proposes various alternatives that could
make the system more efficient when the moratorium expires at the end of the year.