Act 14/2013, of September 27, 2013, favoring entrepreneurs and their internationalization (the “Act”), introduces a wide range of reforms on insolvency, corporate, tax and labor matters. Regarding insolvencies, it takes a more flexible approach to the quorum of financial creditors required for court-sanctioned refinancing agreements and it regulates out-of-court agree-ments for payment as mechanisms for out-of-court negotiation with creditors.


As set out in the Act’s Statement of Motives, to include a more flexible and clearer rule for calculating the majority of creditors executing refinancing agreements that may be approved by the courts, the percentage of financial creditors that must adhere to a refinancing agreement to allow it to be court-sanctioned is reduced. Thus, the 75% of financial debt required under Additional Provision 4 of the Insolvency Act following the reform carried out under Act 38/2011 has been lowered to 55% of financial debt. The Act clarifies that that quorum be superimposed on the quorum required for refinancing agreements under article 71.6 of the Insolvency Act (3/5 of total debt), in line with both doctrine and case law.

The Act also introduces article 71 bis of Insolvency Act, regulating the appointment of the independent expert that will assess the content of refinancing agreements to determine whether they meet the requirements of article 71.6 of the Insolvency Act, making them eligible for the protection against acts of rescission provided in this precept. One notable aspect of this new regime is the possibility of applying for this appointment while the parties are still negotiating the conditions of the agreement, i.e., before the refinancing agreement has been concluded.

These amendments have become effective on September 29, 2013 (the day following the date the Act is published in the Official Gazette of the Spanish State).



The main developments the Act introduces regarding insolvencies include (i) the out-of-court agreement for payment and (ii) the insolvency mediator that will supervise these agreements. Out-of-court agreements for payment offer an alternative for out-of-court negotiation of entrepreneurs’ debts, whether individuals or legal entities. The Act provides different mechanisms to encourage the use of these out-of-court agreements for payment, including the release from residual debts in the event of liquidation in consecutive and fortuitous insolvency of individual entrepreneurs where a minimum amount of liability is covered.

The regulation governing out-of-court settlements for payment will enter into force 20 days after the date the Act is published in the Official Gazette of the Spanish State,1 and will apply only to insolvencies declared after that date.2


Individual entrepreneurs whose liabilities do not exceed €5 million, as well as specific legal entities, will be eligible for these agreements. 3 This option will not be available to entrepreneurs and entities already negotiating a refinancing agreement or whose application for a declaration of insolvency has been admitted to processing, or to anyone that, within the last three years, has (i) reached this type of agreement, (ii) obtained approval for a refinancing agreement, or (iii) been declared insolvent.

Regarding creditors that may be affected by the agreement, the Act specifically excludes holders of public law credits4 and creditors with in rem guarantees that choose not to be a party to the agreement.5


The payment plan proposed to creditors cannot call for a moratorium of over three years, and the write-down or cancellation must not exceed 25% of the amount of the credits. The plan must include a proposal negotiating the conditions for loans and credits and, as the case may be, it must establish an amount as a subsistence allowance for the debtor and the debtor’s family.


Debtors will apply for the appointment of an insolvency mediator to a notary in their place of residence. Entrepreneurs or legal entities that may be entered on the commercial registry must apply to the commercial registrar for the location of their registered office. In the application for an out-of-court agreement for payment, the debtor must state its cash and liquid assets, a list of creditors (including the holders of public law credits and those with in rem guarantees), a list of agreements currently in force and a list of forecasted monthly expenses.

The appointment will be made in the order in which the individuals appear on the list provided by the Ministry of Justice’s Registry of Mediators and Mediation Institutions.

Having accepted the appointment, the mediator will verify the existence and amount of the credits, send the creditors a plan for payment of the credits outstanding on the date of the application, and call them to a meeting to be held within the following two months. The creditors will have 10 calendar days from the date on which the mediator sent the proposed payment plan to submit alternatives or amendments to the plan. If, within that term, creditors representing at least the majority of the liabilities affected by the agreement—not including credits with in rem guarantees and public law credits—decide to abandon negotiations, the mediator must immediately apply for a declaration of insolvency for the debtor.

All creditors that have not stated their approval or opposition must attend the meeting. Otherwise, their credits will be classed as subordinate if the negotiation fails and the debtor is declared insolvent.

The payment plan and the accompanying feasibility plan can be amended at the meeting, provided the payment conditions remain unaffected for the creditors that have not attended because they already stated their position within the specified 10-day term.

Quorum for the approval of the plan requires the affirmative vote of at least 60% of the liabilities affected by the agreement (if the plan calls for assignment of assets in payment, the percentage will be 75%, and the affirmative vote of the creditors with in rem guarantees on the assets involved will be necessary). If these majorities are not attained, the mediator will immediately apply for a declaration of insolvency, which will be processed as consecutive.

The insolvency mediator will supervise the performance of the agreement. On suspicion of any breach, the mediator will apply for consecutive insolvency.


Debtors that choose to negotiate an out-of-court agreement for payment can take advantage of the terms article 5 bis of the Insolvency Act establishes to apply for a declaration of insolvency (three months from the date on which the commercial registrar or notary that appointed the mediator notifies the court of the commencement of negotiations for approval of the agreement + one month for application for a declaration of insolvency).

Also, from the date the commencement of the proceedings is published, any creditors affected by the agreement cannot initiate or continue any enforcement against the debtor’s assets while the agreement is being negotiated and for a maximum term of three months. This prohibition will remain in effect following approval of the agreement in respect of the debts predating the publication of the commencement of the proceedings. Creditors with in rem guarantees may decide to initiate or continue the enforcement proceedings, in which case they will not be eligible to take part in the out-of-court agreement.

When the application has been submitted, debtors may continue operating their business or professional activity, although subject to certain restrictions, such as a ban on seeking financing, the obligation to return any credit cards to the issuing entity, and refraining from using electronic payment methods.


This special procedure will be followed when insolvency is declared at the request of the insolvency mediator, the debtor, or the creditors, in view of the impossibility of reaching an out-of-court agreement for payment, or due to breach or annulment of this agreement. These circumstances will determine the following characteristics of this type of insolvency:

  1. Except with good reason otherwise, the insolvency mediator will be appointed as receiver.
  2. The costs of the out-of-court proceedings will be considered credits against the insolvency state, as will any other credits that are classed as such under article 84 of the Insolvency Act and are generated while the out-of-court proceedings are being processed.
  3. The two-year term to determine rescindable acts will run from the date of the application for the out-of-court agreement for payment.
  4. Creditors that have executed the agreement for payment will not need to apply for recognition of their credits.
  5. Where the debtor is an individual entrepreneur, if the debtor’s insolvency is classed as fortuitous, any debts that are not paid in the liquidation, except any public law debts, will be cancelled if the credits against the insolvency assets and the privi-leged insolvency credits are satisfied in full.

Also, consecutive insolvency must be commenced at the liquidation stage (except in the event of insufficiency of the insolvency assets, under article 176 bis of the Insolvency Act).