Regulatory Alerts2014-03-08
Royal Decree-Law 4/2014 on Urgent Measures for Corporate Debt Refinancing and Restructuring
The Spanish State issued Royal Decree-Law 4/2014 to facilitate the financial restructuring of viable companies by modifying the Insolvency Law to protect pre-insolvency refinancing agreements from rescission. The decree introduces safe harbors for debt-to-equity conversions, grants temporary super-priority status to new financing, and simplifies judicial homologation procedures for creditor agreements. These measures aim to prevent unnecessary liquidations, encourage credit flow, and allow debt to be transformed into capital while respecting creditor rights.
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