As provided for in article 176 bis of the Insolvency Act (IA) “it shall be appropriate to proceed to conclude the insolvency proceedings due to insufficiency of the aggregate assets, where action to obtain integration, to challenge or claim third party liability, or the insolvency proceedings being classified as negligent, is not foreseeable, the assets of the insolvent debtor are not presumed to be sufficient to settle the claims against the estate.
Under such circumstances, the insolvency administration must stop settling both pending and future credits against the insolvency estate, upon their due date, and shall proceed to settle them in accordance with the priority criteria set forth in article 176 bis:
- Salary claims of the last thirty days
- Claims for salaries and compensations
- Maintenance allowance
- Claims for judicial costs and expenses of the insolvency procedure.
- Other claims against the estate.
The only exception to said priority criteria are those credits against the aggregate assets which are indispensable for the conclusion of the winding up of the company, the payment of which may be made in advance of the payment of the rest of the credits against the estate.
That said, we should consider the question in the title of this article, that is
How should the fees of the insolvency administration be classified in situations of insufficiency of aggregate assets? And what is the order of priority for their payment?
In this respect, in a recent judgement of 8th June 2016, the High Court has made the distinction between two types of credits resulting from the fees of the insolvency administration:
(i) Those fees which are strictly necessary for the handling of the winding up of the company. Said fees must have been previously identified as such by the insolvency administration and approved by the insolvency courts with the audience of the rest of the creditors holding credits against the estate.
(ii) The rest of the fees of the insolvency administration corresponding to the expenses generated by the administration of the insolvency procedure.
Thus, while the fees of section (i) are not subject to the order of precedence set forth in article 176 bis because they warrant the classification of “indispensable claims”, and therefore may be paid in preference to the rest of the credits against the estate, the fees of section (ii) may not be assimilated as judicial costs and expenses of the insolvency procedure which make up group 4 of the priority list, therefore, they shall fall within the framework of the residual group 5 of the priority list and shall be paid on a pro rata basis together with the rest of the credits against the estate which do not fit in with one of the preceding groups in the order of priority.
Ismael Marina Schneider
Vilá Abogados
For more information, please contact:
5th August 2016
