This article discusses the recent pronouncement of the Supreme Court in the sentence issued on the 2ndMarch 2021, which considers whether or not a wage credit of an employee of an insolvent company, paid by a legal guarantor following the declaration of insolvency of said company, should be considered as an insolvency claim.
In order to better understand the case, we first need to clarify the factual situation. The controversy regards the payment of several salaries owed to a worker of a municipal swimming pool as a result of her employment relationship with the company awarded with the lifeguarding and teaching services of the pools managed by the Sports Board of the town.
In the first instance, the worker claims the payment of the owed amounts jointly from the aforementioned company as well as the Sports Board.
The Board pays, in compliance with the ruling, the amount which it was legally obliged to pay, during the pendency of the insolvency proceedings. That is, after its declaration and before the conclusion of the proceedings.
At this point, in order to understand the significance of one qualification compared to another, it is important to distinguish the difference between insolvency credits and credits against the estate:
- Insolvency credits are those which make up the company’s liabilities. That is, all those debts which the insolvent party has pursuant to its activity and which exist prior to the declaration of insolvency itself.
- On the other hand, credits against the estate are all those expenses or debts which have arisen after the declaration of insolvency. These must be understood in a restrictive way insofar as they grant a special preference over insolvency credits and they break the principle of the par conditio creditorum (equal treatment of creditors).
As a result of the payment made by the Board, the Board claims that its credit should be deemed as a credit against the estate, for the payment was made while insolvency proceedings were in force; nonetheless, these claims were dismissed in both first and second instance, reaching the Supreme Court by means of an appeal.
The appellant bases the reason for the appeal on the infringement of article 84.2.10 of the Insolvency Act, and the jurisprudential interpretation of said Law (currently governed by article 242), primarily alleging that the credit in its favour emerged when the said appellant made the payment instead of the insolvent company doing so, that is, after the declaration of insolvency.
According to the Supreme Court, the joint obligation of the payment of the Board is not a payment by a third party, but rather as a legal guarantor of payment, pursuant to article 42.2 Workers’ Statute (ET – Estatuto de los Trabajadores), which may direct its subsequent action against the person who did not make the payment, in order to recover what had been paid.
This means that, according to the article, 42.2 of the ET, the obligation to the worker which binds the Board, regardless of when it becomes enforceable, emerges when the obligations mentioned in said article are fulfilled. In this case, the Board has made a payment of an insolvency credit; and for this reason, the fact that the payment was made after the declaration of insolvency does not result in the emergence of a new credit. The credit already exists, and maintains its insolvent nature. Therefore, it cannot be said that it is a credit against the estate, as the appellant claims.
Jaime Madero
Vilá Abogados
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30th April 2021
