REPORT NOTE ON ROYAL DECREE-LAW 27/2021 OF 24 NOVEMBER, EXTENDING CERTAIN ECONOMIC MEASURES TO SUPPORT RECOVERY.

Today, 24 November 2021, the Royal Decree-Law 27/2021 has been published in Spain’s Official State Gazette (BOE). Among other measures in various fields, Article Three of this Decree-Law amends Law 3/2020 of 18 September, on procedural and organisational measures to address COVID-19 within the Administration of Justice.
In insolvency matters, it introduces the following key updates, briefly summarised below:

 1. Extension of the obligation to file for insolvency

The main change is the extension of the obligation to request the declaration of insolvency until 30 June 2022.
Therefore, the two-month period available to a debtor to file for voluntary insolvency will be counted from the end of the suspension period of that obligation — that is, until 1 September 2022.

2. Prórroga concurso necesario.

Compulsory insolvency petitions submitted between 14 March 2020 and 30 June 2022 will not be admitted for processing.

Voluntary insolvency proceedings filed up to 30 June 2022 will take precedence over compulsory petitions, even if the latter were filed earlier.

It should be noted that, on this occasion, no new moratorium has been established regarding the obligation to request liquidation due to non-compliance with an approved agreement — unlike in previous extensions.

Furthermore, Article Three of Royal Decree-Law 27/2021 amends Law 3/2020 in corporate matters by providing that losses incurred in 2021, in addition to those of 2020 (already covered under Article 13.1 of Law 3/2020), shall not be considered for the purposes of determining whether the cause for dissolution set out in Article 363.1(e) of the Spanish Companies Act (Ley de Sociedades de Capital) applies.

If, at the close of the 2022 financial year, the company records losses resulting in undercapitalisation (net equity below half of share capital), a general shareholders’ meeting must be convened within two months (from the close of that financial year) to decide on the dissolution of the company, unless the share capital is increased or reduced accordingly.