The Seventh Final Provision of Law 16/2922 of 5th September (“New Insolvency Act”) introduces amendments to articles 365 (Duty to call the general meeting in order to adopt the winding-up resolution) and 367 (Joint and several liability of directors) of the Spanish Companies Act.

I.- With regard to the first article.

In accordance with the former text, the directors must call the general meeting within two months for: (i) the adoption of the winding-up resolution (ii) or, if the company is insolvent, to call for insolvency proceedings. Any partner was able to request that the directors carry out said call, if it was understood that any grounds for winding-up existed or that the company was insolvent. The general meeting was able to adopt the winding-up resolution or, if it was included in the meeting agenda, those resolutions necessary for the removal of the cause.

According to the New Insolvency Act, this obligation on the part of the directors remains, albeit:

  1. The requirement of a legal or statutory cause is added.
  1. The partner’s faculty to request a meeting is maintained, although only in the first case.
  1. The faculty of the general meeting to adopt the winding-up resolution or those necessary for the removal of the cause are maintained.
  1. An exception to the duty of the directors to call the general meeting is established when they have: (i) applied for the declaration of insolvency in proper form, or (ii) communicated to the Court that negotiations with creditors to reach a plan for restructuring assets, liabilities or both are underway.
  1. It is added that the call of the meeting will again be obligatory upon the cease of the effects of the communication to the Court of the existence of negotiations.

II.-  With regard to the second article.

According to the previous wording, the directors not complying with the obligation to: (a) call the general meeting within the term of two months for adopting the winding-up resolution or (b) request the judicial winding-up or insolvency proceedings within two months from the intended date of holding the meeting (if the meeting had not been constituted) or from the day of the meeting (agreement contrary to winding-up), were jointly and severally liable for the company’s obligations after the date on which the legal cause for winding-up arose.

The company obligations claimed were presumed to be of a date subsequent to the occurrence of the legal cause for winding-up, unless the directors proved that they were of an earlier date.

According to the New Insolvency Act, the directors not complying with their obligation to:  (a) call the general meeting within the term of two months as from the occurrence of a legal or statutory cause for winding-up or, in the event of a subsequent appointment, from the date of accepting the post, for adopting the winding-up resolution or those necessary for the removal of the cause, and/or (b) request the judicial winding-up or insolvency proceedings within two months from the intended date of holding the meeting (if the meeting had not been constituted) or from the day of the meeting (in the event of an agreement contrary to winding-up), will be jointly and severally liable for the company’s obligations after the date on which the legal cause for winding-up arose, or in the case of appointment in this meeting or subsequent thereto, for the company’s obligations after the date of accepting the appointment.

Furthermore:

  • Unless there is evidence to the contrary, the company’s obligations, the fulfilment of which are claimed through the courts by the legitimate creditors will be presumed to be of a date subsequent to the occurrence of the legal cause for winding-up or to the acceptance of the appointment by the director.
  • An exception is introduced whereby although a legal or statutory cause for winding-up exists, the directors will not be responsible for the debts subsequent to the occurrence of the cause for winding-up (or in the case of appointment in this meeting or subsequent thereto, for the company obligations following the acceptance of the appointment) if, within the term of two months from the occurrence of the cause for winding-up (or the acceptance of the appointment) they have:
  • Communicated to the court that negotiations with the creditors are underway for attaining a restructuring plan.
  • Requested the declaration of insolvency proceedings.
  • If the restructuring plan is not achieved, the term of two months for calling the general meeting is resumed from the moment that the communication is no longer effective.

 

 

Vilá Abogados

Mireia Bosch

 

For more information, please contact:

va@vila.es

 

25th November 2022