Royal Legislative Decree 1/2020 of 5 May approving the consolidated text of the Bankruptcy Law

OFFICIAL STATE GAZETTE No. 127 Thursday, May 7, 2020 Sec. I. Page 31518 I. GENERAL PROVISIONS MINISTRY OF THE PRESIDENCY, RELATIONS WITH THE CORTES AND DEMOCRATIC MEMORY 4859 Royal Legislative Decree 1/2020, of May 5, approving the consolidated text of the Bankruptcy Law.

Index Book One. On the creditors' bankruptcy. Title I. On the declaration of bankruptcy. Chapter I. On the prerequisites for the declaration of bankruptcy. Chapter II. On standing. Chapter III. On the declaration of bankruptcy at the request of the debtor. Section 1st. On the duty to request the declaration of bankruptcy. Section 2nd. On the debtor's request. Section 3rd. On the provision regarding the debtor's request. Chapter IV. On the declaration of bankruptcy at the request of creditors and other entitled parties. Section 1st. On the request of creditors and other entitled parties. Section 2nd. On the provision regarding the request of creditors and other entitled parties. Section 3rd. On the debtor's opposition. Section 4th. On the resolution regarding the request. Chapter V. On the order declaring bankruptcy. Section 1st. On the order declaring bankruptcy. Section 2nd. On the notification of the order declaring bankruptcy. Section 3rd. On the publicity of the declaration of bankruptcy. Chapter VI. On related bankruptcies. Section 1st. On the joint declaration of bankruptcies. Section 2nd. On the accumulation of already declared bankruptcies. Section 3rd. On the coordinated processing of related bankruptcies. Title II. On the organs of the bankruptcy. Chapter I. On the bankruptcy judge. Section 1st. On competence. Section 2nd. On jurisdiction. Chapter II. On the bankruptcy administration. Section 1st. On the appointment of the bankruptcy administration. Subsection 1st. On the composition of the bankruptcy administration. Subsection 2nd. On the requirement of registration in the Public Bankruptcy Register. Subsection 3rd. On the appointment of the bankruptcy administration. Subsection 4th. On the disqualification of the bankruptcy administration. Subsection 5th. On delegated assistants. cve: BOE-A-2020-4859 Verifiable at https://www.boe.es

OFFICIAL STATE GAZETTE No. 127 Thursday, May 7, 2020 Sec. I. Page 31519 Section 2nd. On the exercise of the office. Section 3rd. On remuneration. Subsection 1st. On the legal regime of remuneration. Subsection 2nd. On the tariff guarantee account. Section 4th. On liability. Section 5th. On removal and revocation. Title III. On the effects of the declaration of bankruptcy. Chapter I. On the effects on the debtor. Section 1st. On the effects on the bankrupt in general. Section 2nd. On the effects on the representation and procedural defense of the bankrupt. Section 3rd. On the specific effects on natural persons. Section 4th. On the specific effects on legal persons. Section 5th. On the duties to appear, collaborate, and provide information by the bankrupt. Chapter II. On the effects on individual actions. Section 1st. On the effects on actions and declaratory proceedings. Section 2nd. On the effects on actions and enforcement proceedings. Subsection 1st. On the general rules. Subsection 2nd. On the special rules for enforcement proceedings of real guarantees and similar. Chapter III. On the effects on credits. Chapter IV. On the effects on contracts. Section 1st. On the effects on contracts. Section 2nd. On the termination of contracts. Subsection 1st. On termination for breach. Subsection 2nd. On termination in the interest of the bankruptcy. Section 3rd. On the right to rehabilitation of contracts. Section 4th. On the effects on employment contracts and collective agreements. Subsection 1st. On the effects on employment contracts. Subsection 2nd. On the effects on contracts of senior management personnel. Subsection 3rd. On the effects on collective agreements. Section 5th. On the effects on contracts with public administrations. Title IV. On the active mass. Chapter I. On the composition of the active mass. Chapter II. On the inventory of the active mass. Chapter III. On the conservation and alienation of the active mass. Section 1st. On the conservation of the active mass. Section 2nd. On the alienation of assets and rights of the active mass. Subsection 1st. On the general rules. Subsection 2nd. On the special features of the alienation of assets or rights subject to special privilege. Subsection 3rd. On the special features of the alienation of productive units. Subsection 4th. On the cancellation of encumbrances. cve: BOE-A-2020-4859 Verifiable at https://www.boe.es

OFFICIAL STATE GAZETTE No. 127 Thursday, May 7, 2020 Sec. I. Page 31520 Chapter IV. On the reintegration of the active mass. Section 1st. On special rescissory actions. Section 2nd. On other reintegration actions. Chapter V. On the reduction of the active mass. Chapter VI. On credits against the active mass. Section 1st. On credits against the active mass. Section 2nd. On the regime of credits against the active mass. Section 3rd. On the special cases in the event of insufficiency of the active mass. Title V. On the passive mass. Chapter I. On the integration of the passive mass. Chapter II. On the communication and recognition of credits. Section 1st. On the communication to creditors. Section 2nd. On the communication of credits. Section 3rd. On the recognition of credits. Subsection 1st. On the classes of recognition. Subsection 2nd. On the special cases of recognition. Section 4th. On the computation of credits. Section 5th. On the late communication of credits. Chapter III. On the classification of bankruptcy credits. Section 1st. On the classes of credits. Section 2nd. On privileged credits. Subsection 1st. On credits with special privilege. Subsection 2nd. On credits with general privilege. Section 3rd. On subordinated credits. Chapter IV. On the list of creditors. Title VI. On the report of the bankruptcy administration. Chapter I. On the report of the bankruptcy administration. Section 1st. On electronic communications prior to the submission of the report. Section 2nd. On the report of the bankruptcy administration. Chapter II. On the challenge of the inventory and the list of creditors. Chapter III. On the submission of the definitive texts and the end of the common phase. Section 1st. On the submission of the definitive texts. Section 2nd. On the completion of the common phase. Chapter IV. On the modification of the definitive list of creditors. Title VII. On the agreement. Chapter I. On the proposal for an agreement. Section 1st. On the proposers. Section 2nd. On the content of the agreement proposal. Subsection 1st. On the general rules regarding the agreement proposal. Subsection 2nd. On the agreement proposal with assumption. Subsection 3rd. On the alternative content of the agreement proposal. Section 3rd. On the payment plan and the viability plan. cve: BOE-A-2020-4859 Verifiable at https://www.boe.es

OFFICIAL STATE GAZETTE No. 127 Thursday, May 7, 2020 Sec. I. Page 31521 Chapter II. On the submission of the proposal and its admission for processing. Section 1st. On the time of submission of the proposal. Subsection 1st. On the early submission of the agreement proposal. Subsection 2nd. On the ordinary submission of the agreement proposal. Section 2nd. On the admission for processing of the agreement proposal. Chapter III. On the evaluation of the agreement proposal. Chapter IV. On the acceptance of the agreement proposal by creditors. Section 1st. On the acceptance of the proposal. Section 2nd. On the adhesion to the agreement proposal. Section 3rd. On the acceptance system for the early agreement proposal. Section 4th. On the acceptance of other agreement proposals. Subsection 1st. On acceptance in the creditors' meeting. Subsection 2nd. On acceptance in case of written processing. Section 5th. On the passivity majorities necessary for the acceptance of the agreement proposal. Section 6th. On the verification and proclamation of the result. Section 7th. On the acceptance of the agreement proposal by the bankrupt. Chapter V. On the judicial approval of the agreement. Section 1st. On the necessary nature of the judicial approval of the agreement. Section 2nd. On the opposition to the judicial approval of the agreement. Section 3rd. On the judicial approval of the agreement. Chapter VI. On the efficacy of the agreement. Chapter VII. On the compliance with the agreement. Section 1st. On the compliance with the agreement. Section 2nd. On the non-compliance with the agreement. Title VIII. On the liquidation of the active mass. Chapter I. On the opening of the liquidation phase. Chapter II. On the effects of the opening of the liquidation phase. Chapter III. On the liquidation operations. Section 1st. On the general liquidation rules. Section 2nd. On the liquidation plan. Section 3rd. On the supplementary rules. Subsection 1st. On the alienation procedure. Subsection 2nd. On the rule of the whole. Chapter IV. On the publicity of the assets and rights subject to liquidation. Chapter V. On the quarterly liquidation reports. Chapter VI. On preventive consignation. Chapter VII. On the undue prolongation of the liquidation. Title IX. On the payment to bankruptcy creditors. cve: BOE-A-2020-4859 Verifiable at https://www.boe.es

OFFICIAL STATE GAZETTE No. 127 Thursday, May 7, 2020 Sec. I. Page 31522 Title X. On the qualification of the bankruptcy. Chapter I. General provisions. Chapter II. On the qualification section. Section 1st. On the formation and processing of the qualification section. Subsection 1st. On the general regime. Subsection 2nd. On the special regime in case of non-compliance with the agreement. Section 2nd. On the qualification judgment. Section 3rd. On the qualification in case of administrative intervention. Title XI. On the conclusion and reopening of the creditors' bankruptcy. Chapter I. On the conclusion of the bankruptcy. Section 1st. On the causes of conclusion of the bankruptcy. Section 2nd. On the regime of conclusion of the bankruptcy. Subsection 1st. On the conclusion of the bankruptcy by revocation of the declaration. Subsection 2nd. On the conclusion of the bankruptcy by compliance with the agreement. Subsection 3rd. On the conclusion of the bankruptcy by completion of the liquidation. Subsection 4th. On the conclusion due to insufficiency of the active mass simultaneous with the declaration of the bankruptcy. Subsection 5th. On the conclusion due to insufficiency of the active mass subsequent to the order declaring the bankruptcy. Subsection 6th. On the conclusion of the bankruptcy by satisfaction of creditors, by withdrawal, or by renunciation. Section 3rd. On the rendering of accounts. Section 4th. On appeals and publicity. Section 5th. On the effects of the conclusion of the bankruptcy. Chapter II. On the benefit of the exemption of unsatisfied liabilities. Section 1st. On the scope of application. Section 2nd. On the general regime. Subsection 1st. On the prerequisites for the exemption. Subsection 2nd. On the request for exemption and the granting of the benefit. Subsection 3rd. On the extension of the exemption. Subsection 4th. On the revocation of the exemption. Section 3rd. On the special regime of exemption upon approval of a payment plan. Section 4th. On the common effects of the exemption. Chapter III. On the reopening of the bankruptcy. Title XII. On the general procedural rules, the abbreviated procedure, the bankruptcy incident, and the appeal system. Chapter I. On the processing of the procedure. Chapter II. On the abbreviated procedure. Section 1st. On the application of the abbreviated procedure. Section 2nd. On the special features of the abbreviated procedure. Chapter III. On the bankruptcy incident. Chapter IV. On the appeals. cve: BOE-A-2020-4859 Verifiable at https://www.boe.es

OFFICIAL STATE GAZETTE No. 127 Thursday, May 7, 2020 Sec. I. Page 31523 Title XIII. On the publicity of the bankruptcy. Chapter I. On telematic publicity. Chapter II. On edicts. Chapter III. On writs. Chapter IV. On the public bankruptcy register. Title XIV. On bankruptcies with special features. Chapter I. On the bankruptcy of the estate. Chapter II. On the special features of the bankruptcy by reason of the person of the debtor. Section 1st. On special communications and notifications. Section 2nd. On the special features of the bankruptcy administration. Section 3rd. On the special features of the bankruptcy of credit entities, investment service companies, insurance entities, entities that are members of regulated markets, and entities participating in securities clearing and settlement systems. Section 4th. On the special features of the bankruptcy of companies concessionaires of public works and services or contractors of public administrations. Section 5th. On the special features of the bankruptcy of sports entities. Book Two. On pre-insolvency law. Title I. On the communication of the opening of negotiations with creditors. Chapter I. On the communication of the opening of negotiations with creditors. Chapter II. On the effects of the communication. Section 1st. On the effects of the communication on credits. Section 2nd. On the effects of the communication on actions and enforcement proceedings. Section 3rd. On the effects on bankruptcy requests. Chapter III. On the enforceability of the legal duty to request bankruptcy. Title II. On refinancing agreements. Chapter I. On refinancing agreements. Section 1st. On the classes of refinancing agreements. Section 2nd. On collective refinancing agreements. Section 3rd. On singular refinancing agreements. Chapter II. On the homologation of refinancing agreements. Section 1st. On the requirements for homologation. Section 2nd. On judicial homologation. Subsection 1st. On the homologation procedure. Subsection 2nd. On the challenge of the homologation. Section 3rd. On the extension of the efficacy of the homologated refinancing agreement. Subsection 1st. On the extension to credits without real guarantee. Subsection 2nd. On the extension to credits with real guarantee. Subsection 3rd. On the conservation of personal guarantees. Chapter III. On the non-compliance with the refinancing agreement. cve: BOE-A-2020-4859 Verifiable at https://www.boe.es

OFFICIAL STATE GAZETTE No. 127 Thursday, May 7, 2020 Sec. I. Page 31524 Title III. On the out-of-court payment agreement. Chapter I. On the prerequisites. Chapter II. On the appointment of the bankruptcy mediator. Section 1st. On the request for the appointment of the bankruptcy mediator. Section 2nd. On the appointment of the bankruptcy mediator. Subsection 1st. On the appointment. Subsection 2nd. On the acceptance. Section 3rd. On the communication of the appointment. Section 4th. On the supplementary regime. Section 5th. On the duty to request postponement or installment of the obligation to pay public law credits. Chapter III. On the duties of verification. Chapter IV. On the out-of-court payment agreement. Section 1st. On the convening of creditors. Section 2nd. On the proposal for the out-of-court payment agreement. Subsection 1st. On the proposal. Subsection 2nd. On the documents attached to the proposal. Section 3rd. On the acceptance of the proposal. Subsection 1st. On the duty of assistance. Subsection 2nd. On the majorities. Section 4th. On the formalization of the agreement. Chapter V. On the efficacy of the agreement. Chapter VI. On the challenge of the agreement. Chapter VII. On the compliance with the agreement. Title IV. On the special features of the consecutive bankruptcy. Chapter I. On the consecutive bankruptcy. Chapter II. On the common rules in matters of consecutive bankruptcy. Section 1st. On the special features in matters of reintegration of the active mass. Section 2nd. On the special features in matters of qualification of the bankruptcy. Chapter III. On the special features of the consecutive bankruptcy following a refinancing agreement. Chapter IV. On the special features of the consecutive bankruptcy following an out-of-court payment agreement. Section 1st. On the request for consecutive bankruptcy. Section 2nd. On the regime of the consecutive bankruptcy. Book Three. On the rules of private international law. Title I. General provisions. Title II. On the applicable law. Chapter I. On the main procedure. Chapter II. On the territorial procedure. Chapter III. On the common rules to both types of procedures. Title III. On the recognition of foreign insolvency proceedings. Title IV. On the coordination between parallel insolvency proceedings. cve: BOE-A-2020-4859 Verifiable at https://www.boe.es

I The history of the Bankruptcy Law is the history of its reforms. It is difficult to find a law that, in so few years, has undergone so many and so profound modifications. The hopes that this new law had aroused, with the logical aspiration for normative stability, soon vanished: from the date of promulgation of this law, successive laws and decree-laws, with an accentuated rhythm in the tenth legislature, have replaced principles and amended legal norms, while constituting the channel for the inclusion of new institutions and new solutions. During the gestation of what would become Law 22/2003, of July 9, Concursal, it had been debated whether to incorporate into the then projected law the institutions proper to the so-called pre-insolvency law, taking advantage of some experiences from other legal systems; the risks entailed by the rigid structure of the procedure, divided into phases, and those derived from an excess in the attribution of competences to the bankruptcy judge, to the detriment of the indispensable scope of autonomy of the bankruptcy administration, had been identified; and, finally, the costs, in time and economic terms, of the design in which work was being done had been noted. However, the bad experience that, in the immediate past, had resulted from the deformation of procedures formally predisposed for the treatment of illiquidity situations, which had ended up overlapping with traditional procedures for the solution of genuine insolvencies, militated against the distinction between bankruptcy law and pre-insolvency law. The admission of imminent insolvency as an alternative prerequisite for voluntary bankruptcy was considered sufficient. And, besides, perhaps there was a lack of perspective to appreciate that the new institutions emerging in other legislative systems had little to do with the old suspensions of payments. On the other hand, the alleged rigidity of the bankruptcy procedure and the many functions attributed to the bankruptcy judge were not considered a special problem due to the simultaneous creation of specialized Courts, in which full confidence was placed for the secure and rapid processing of creditors' bankruptcies. In the legislator's mind, the figure of the early agreement was the predisposed channel for the rapid solution of insolvency. But, shortly after the law was promulgated, the profound and lasting crisis through which the Spanish economy was passing evidenced the defects and insufficiencies of the new legislation, and the corresponding increase in bankruptcy procedures did not long delay in collapsing the commercial courts. At the same time, symptoms of the "flight from the Bankruptcy Law" began to be appreciated. Indeed, some important Spanish companies in crisis situations, instead of requesting bankruptcy due to actual or imminent insolvency, resorted, whenever possible, to foreign forums, with good results, to benefit from solutions that Spanish legislation lacked. The Spanish legislator felt constrained to intervene, frequently invoking reasons of extraordinary and urgent need, to try to provide an adequate solution to what had none, although this sometimes involved the replacement of basic elements of the newly established bankruptcy system and the expansion of the possibilities originally offered by the new law in order to achieve a more adequate, more flexible, and fairer solution of the conflicting interests. Among other fundamental modifications, the incorporation of the criterion of the fair value of the asset or right on which the guarantee was constituted as the limit of the special privilege of the secured credit, the recognition of the debtor's right to request the opening of liquidation at any time, the regime of bankruptcies without sufficient mass to cover the costs of the procedure, and the introduction of the benefit of the exemption of unsatisfied liabilities, which, under certain conditions, the natural person debtor may enjoy, may be mentioned. Along with stable reforms, those that, once introduced, have not been subject to reconsideration, there have been cases of reforming the reformed, in a continuous process of design and redesign, as happened with the regime of refinancing agreements, as the insufficiencies of the first solutions manifested themselves, thus accentuating the instability of the legislation. From that law that aspired to be stable, we thus passed to a law in perpetual refashioning. That accumulation of reforms justified that the eighth final provision of Law 9/2015, of May 25, on urgent measures in bankruptcy matters, enabled the Government to approve a consolidated text of Law 22/2003, of July 9. The expiration of the deadline established for the consolidation has motivated that in Law 1/2019, of February 20, on Trade Secrets, a third final provision was included that enabled a new deadline to approve a consolidated text upon proposal of the Ministers of Justice and of the then named Ministry of Economy and Enterprise. This authorization includes the power to regularize, clarify, and harmonize the legal texts that are to be consolidated. In few cases is the need for a consolidated text more necessary. The difficulties that, after so many reforms, the reading and interpretation of legal norms and even the understanding of the internal logic of the current bankruptcy system entail, required not postponing any longer that task, which, although delicate, is unavoidable to face. II The General Courts have established the method and, at the same time, fixed the limits of the mandate to the executive power. The consolidated text of the Bankruptcy Law must be the result of the regularization, clarification, and harmonization of legal norms that, like those that are the object of consolidation, were born at different times and were generated from conceptions not always coincident. To regularize means to adjust, regulate, or put in order. To clarify is a verb of multiple meanings: sometimes, it refers to removing what prevents appreciating the reality of something; other times, it implies the idea of explaining. And to harmonize is equivalent to making two or more parts of a whole not discordant. The authorization is not limited to the mere formulation of a consolidated text