caused by the health crisis caused by COVID-19 are included in Royal Decree Law 8/2020, of March 17, 2020. These measures are also applicable to companies in bankruptcy
Given the situation caused by the coronavirus pandemic worldwide, the government has decided to draw up a series of regulations that will be valid for as long as the exceptional situation represented by the state of alarm is maintained.
Companies that are in bankruptcy proceedings are affected within this unique context and how they are affected by the state of alarm has been explained in another article that, as expert lawyers in bankruptcy law, we have published to explain these legal implications. .
Aid to companies in bankruptcy during the state of alarm through ICO credits
Regarding the problem of financing companies during the state of alarm as a result of the pandemic caused by COVID-19, especially in light of the great mobility restrictions and the suspension of all activities considered non-essential for two weeks, it has required a response from the Government, which has been reflected in Royal Decree Law 8/2020, of March 17, through an ICO credit line.
What are ICO credits?
The ICO is the Instituto de Crédito Oficial, a public bank belonging to the State, and acts as an instrument of the latter, with an autonomous patrimony. This Institute has been instructed by the Government to make two lines of guarantees available to companies, which will be delivered to credit institutions based on demand.
The first of these is 20,000 million, of which half will be used to cover, retroactively, the loans granted since March 18, and will be supervised by the Bank of Spain. There are 86 credit institutions that have signed the agreement to grant these lines of credit.
The second of them, of 20,000 million euros, carried out before the consumption of the previous line of credit, in order for SMEs and the self-employed to be beneficiaries, reinforcing the requirements for access to these lines of credit.
The price of these lines of credit, which will be guaranteed by the State through the Official Credit Institute, may not be higher than the same operations carried out in credit institutions that do not have this guarantee, and there may not be a reduction in the Interest for the acquisition of products linked to the loan, as usually happens in loans that do not have a guarantee.
Aid to companies in bankruptcy during the state of alarm on leases
Regarding leases for use other than housing (premises), Royal Decree Law 15/2020, of April 21, has established a procedure so that the landlord and tenant can reach an agreement to modulate the rent of the rentals of local.
If the landlord is also a company or public entity, or a large holder (more than 10 properties, not counting parking lots and storage rooms, or the owner of a property of more than 1,500 square meters), we can request a moratorium that does not exceed four months. If the landlord is not in that profile, we can request the temporary and extraordinary postponement of the rent if no voluntary measure has been taken.
Finally, the three-month period to prepare Annual Accounts, from the close of the Fiscal Year, will be suspended until the end of the state of alarm, granting the company another three months, once it ends, and the period to legalize books will also be suspended. up to four months from the end of the state of alarm.
Aid to companies in bankruptcy during the state of alarm in relation to workers: the ERTE
ERTE in companies in bankruptcy
Royal Decree Law 11/2020, in its first final provision, modifies Royal Decree Law 8/2020, of March 17, through a series of measures that aim to specify more accurately the regulation that is developed in it.
For this reason, a new Tenth Additional Provision “specialties in application of Chapter II to insolvent companies” is introduced, which broadens the content of Royal Decree Law 8/2020 in the sense of enabling the application of contract suspension and reduction of working hours for force majeure and for economic, technical, organizational and production reasons to companies in bankruptcy.
The same norm renders null and void the competence of the Commercial Court to hear the action whose purpose is to collectively suspend work contracts of a natural or legal person in bankruptcy, being the competence of the labor authority.
If we found ourselves in the event that our ERTE had been processed before the publication of Royal Decree Law 11/2020
we will have to be at the existence of resolution. If the Commercial Court had ruled in this regard, this recognition of benefits will have the effects provided for in Royal Decree Law 8/2020. If, on the contrary, despite having processed before the publication of Royal Decree Law 11/2020, there is still no resolution, the Commercial Judge should refrain in favor of the Labor Authority, under the procedures of articles 22 and 23 of Royal Decree Law 8/2020.
What do we need to process an ERTE in a company in bankruptcy?
It will be necessary for the communication of the temporary employment regulation file to be made by the Bankruptcy Administrator if the powers of the debtor or its governing bodies have been limited.
In any case, the Bankruptcy Administration must be part of the consultation period that is included in article 23 of Royal Decree Law 8/2020. And if no agreement is reached during the consultation period, in case of intervention of powers, for the application of the measures on suspension of contracts or reduction of working hours, we will need the authorization of the Bankruptcy Administration.
The Commercial Judge must be immediately informed of the request for a temporary employment regulation file submitted to the Labor Authority, and, as soon as possible, of the resolution of the labor authority and the measures adopted.
In conclusion, the bankruptcy measures for legal persons during the state of alarm caused by the COVID-19 pandemic have attempted to extend terms, relax obligations in the temporary space, offer refinancing lines and allow temporarily suspending those employment contracts that could not carry out their habitual activity due to the coronavirus, or that due to the economic circumstances of the company, being suspended allowed a respite to the more than tight treasuries.
Similarly, the reduction in working hours to make a new reality compatible during the coronavirus has tried to balance this situation for workers.
Therefore, if that point is reached, it is essential that a lawyer review our case, to be able to advise us on the deadlines, obligations and consequences, since bankruptcy law gives special weight to how things are done, a lawyer specialized in bankruptcy law will always be our best help.
Toro Pujol Abogados has been advising companies in insolvency and debt restructuring cases since 1975, being that when the legal obligation to declare a bankruptcy is reached, we are a guarantee that we will travel the path with you, solving the problems that arise and accompanying you During all the process.
From our offices in Barcelona, Madrid and Montcada i Reixac we can assist you physically and electronically for the rest of the Spanish geography. Do not hesitate, call us and request a first visit, free. We will evaluate your case and inform you about the feasibility of your case and the next steps to take.