The moratorium on the legal obligation to file for insolvency proceedings ends on 14 March 2021
Following the declaration of the state of alarm and in order to avoid an avalanche of applications for insolvency proceedings, a moratorium on this legal obligation was approved by virtue of which debtors who were in a situation of insolvency were not obliged to apply for insolvency proceedings until 31 December 2020.
This moratorium was subsequently extended until 14 March 2021.
Although it has not been ruled out that the Government may approve a further extension of the moratorium, two weeks before the expiry of this deadline, no decision has been made in this respect, which means that companies that have been in a situation of insolvency will be obliged to file for insolvency proceedings imminently.
There is the possibility of using one of the pre-bankruptcy institutions (Refinancing Agreement, Early Arrangement or Out-of-Court Payment Agreement) before 14 March, which would extend the legal deadline for filing the subsequent insolvency proceedings by an additional four months (or an additional three months in the case of natural persons who are not considered to be entrepreneurs).
If it is decided to file directly for insolvency proceedings before 14 March, the range of possibilities offered by insolvency legislation should be taken into account.
In this regard, it is possible to file for insolvency proceedings with the intention of approving a creditors’ agreement or requesting liquidation from the outset, or not; to file together with an offer to purchase the production unit or without it; to file with the continuation of the activity or requesting the cessation of activities; to file for the termination of employment contracts before the insolvency proceeding or within the insolvency proceeding, etc.
This range of possibilities requires a prior analysis process and a subsequent phase of preparation of the necessary documentation.
These processes are not usually quick, so companies that have been in a situation of insolvency for some time should not delay any longer in taking decisions or starting the work of preparing the insolvency application or the pre-insolvency notice, if they want to comply with their obligations within the legally stipulated deadlines.
The Litigation Department of AddVANTE remains at your disposal for further information or to resolve any queries that may arise in relation to this article.