The new extension of the Bankruptcy moratorium aggravates the risk of judicial collapse and zombies companies

The Government has extended the bankruptcy to the bankruptcy until June 30, 2022, with which it maintains that the debtors who are in the situation of insolvenc

The new extension of the Bankruptcy moratorium aggravates the risk of judicial collapse and zombies companies

The Government has extended the bankruptcy to the bankruptcy until June 30, 2022, with which it maintains that the debtors who are in the situation of insolvency have no duty to request the declaration of contest at least for half a year.

By expanding Law 16/2020 - which initially maintained the moratorium until December 31, 2020 and later it was extended until December 31, 2021, we will not be admitted to processing applications for the necessary competition.

The objective is that "viable companies under normal market conditions have legal instruments that allow them to maintain their activity and employment and have an additional margin to restore their patrimonial balance as long as the modernization of the Spanish bankruptcy regime is processed," Ha explained the Government on Tuesday after the meeting of the Council of Ministers.

But the extension of this insolvency moratorium entails two risks. On the one hand, it increases the likelihood that there is a judicial collapse when the obligation of presenting competitions is reestablished, as there will be a wave of entrances in the courts that should be combined with those who were in process.

And, on the other hand, given that companies have no obligation to declare in a contest, some experts warn that they are not taking sufficient measures to guarantee their survival with which the risk of growing the number of zombies companies is aggravated.

From this last he has warned the Bank of Spain on numerous occasions. "The bankruptcy, if prolonged over time, can contribute to a higher survival rate of unavoidable companies, which, in the absence of certain financial support measures (banking refinancing or new credit of their contractual counterparts), would disappear in a brief term. In the economic literature, these companies are often called zombies companies, "he said.

Once the moratorium expires, now in June 2022, a significant rebound can be expected of the number of contest requests.

"The ease with which they become judged from the mercantile reveals the relevance of analyzing possible solutions that promote the restructuring of the debts of insolventing but viable companies in the medium term, facilitate the liquidation of unavoidable companies and reduce the duration of the Bankruptcy proceedings to avoid depreciation of business assets and increase credit recovery rates by creditors ", has requested the supervisor.

The registration of forensic economists (reinforcement) warned today that some of the main threats is a "possible collapse in the accumulation of accumulation of creditors after the end of the bankruptcy resort on December 31, 2021 and for coexistence of contests Live from the system still valid; in which they are going to coexist for a while both systems ".

It coincides in this warning Manuel Gordillo, partner of the ABEENCS office, who points out that "in view of the number of contests presented so far this year, it is evident that the Bankruptcy Moratory is generating a sedative effect on companies in difficulties, subming them in A false feeling that the decision on measures to be adopted for business survival can be postponed indefinitely. "

"The bankruptcy moratorium is not helping to promote survival but the opposite, postponing artificially the solution to the problem. Many companies in difficulties, who should have already faced difficult but necessary measures, continue to aggravate their state and away from a solution and away from a solution and away from a solution. ", the Mint.

He is a supporter that requirements are set to be able to take advantage of this moratorium, and believe that there are many companies that have been welcomed to the expansion of the bankruptcy, delaying the presentation of contest by not being forced to do so. "In this way, they are increasingly recurrent in the business tissue, the zombies companies that, in reality, even if they appear active, do not have the capacity to continue with their activity," he says.

It shows more Rotundo Ignasi Figueras, partner of FTI & Partners, who believes that the moratorium "entails a serious domino effect, since the common creditors of these companies will not charge, dragging other companies, generating unemployment and a very high spending for the Status coffers by disbursement of labor compensation (Fogasa) and unemployment benefits. "

"We are in a state of shock, the new moratorium is incomprehensible and a ruin for the country. It is a backward kick only to make up statistics (the reality of companies is totally different) and for public bodies to enjoy total freedom to collect (Way execution) Your credits, which would not happen in a contest, "denounces.

It also regrets that the moratorium acts as "award" for the employer who does not act with due diligence, which has as a consequence "the flight of international investors for not having enough legal certainty."

"What is not understood is that, after the effort made, at a time of liquidity crisis, as is the current one, the government instead of promoting the business solution with the right tool in this regard (Creditor Contest with continuity solution) , it transmits that this bankruptcy tool should not be used, with which it throws over the ground all the effort made to date and manages to lengthen at the same time to worsen the economic crisis derived from the COVID-19, "he says.

Updated Date: 25 November 2021, 18:26

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