In September 2022, the Insolvency Act was amended to introduce restructuring plans. The new regulation has various effects on the partners of a family business. In this post we analyse the reform and the consequences of the restructuring plan on the shareholders.
The reform of the Insolvency Act came about as a result of the transposition of European Directive 2019/1023 on restructuring and solvency and aims to promote preventive corporate restructuring mechanisms. To this end, restructuring plans are included in the insolvency law.
One of the most common problems in pre-bankruptcy restructurings is the so-called “Holdout” of shareholders, which refers to the blocking actions taken by certain shareholders against a viable restructuring out of fear of dilution. This may involve their refusal to reach agreements for capital increases or the sale of essential assets of the company, which are essential operations to carry out the restructuring.
Leialta website: https://www.leialta.com/en/
Blog for doing business in Spain: https://www.leialta.com/en/blog-for-doing-business-in-spain/
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