Solutions for companies in crisis. We answer the questions of the new law
The entry into force of the new Insolvency Act on 1 September 2004, has been a change in the treatment of insolvencies in Spain. Desaparece suspension of payments and bankruptcy and establishes the meeting of creditors as a way to resolve situations of insolvency. The new trade rules wager on business continuity in crisis thanks to an agreement among creditors, providing a fully transparent formula for restructuring and bailout of businesses and, ultimately, liquidation. Under the new legislation the companies lack of liquidity must voluntarily file a contest before they run out all their assets and within two months following the date on which he had known or have known of his insolvency. No longer possible for employers to close their businesses leaving without paying creditors and employees.
The new law also entails great responsibilities for managers and entrepreneurs. It enhances the obligation to go to competition when their company is insolvent or is imminent. Many managers are unaware of the very serious responsibilities that will confront and mismanagement that may impact business
even in their own personal assets.
Another important factor that employers must consider is whether the contest is requested by the company itself – a voluntary basis – which administrators keep their powers but are subject to the intervention of bankruptcy administration or whether the contest is called by creditors – competition needed – where managers lose all their powers go exclusively to the administration in bankruptcy. For more information on these two modes go to “The lawyer replied …”.
To remove any doubt that the employer might have, Madruga Association has published a book entitled “The Lawyer responds to questions of the new Bankruptcy Act. In this book you can find in full on this website, you will find a detailed explanation of the details of the rights and obligations should know the employer-debtor in colloquial speech and affordable on a number of questions and answers related to the new Law Bankruptcy and which must be taking into account now.
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