RENTA CORPORACIÓN: CENTRE OF MAIN INTERESTS IN SPAIN
On the advice of Cuatrecasas, Gonçalves Pereira, RENTA CORPORACIÓN REAL ESTATE S.A. (“Renta Corporación”) applied for a declaration of insolvency jointly with three of its Spanish subsidiaries (RENTA CORPORACIÓN REAL ESTATE ES S.A.U., RENTA CORPORACIÓN REAL ESTATE FINANCE S.L.U. and RENTA CORPORACIÓN CORE BUSINESS S.L.U.).
Renta Corporación is a listed company operating in the real estate sector, specialising in the purchase, restoration and marketing of residential and commercial properties located in the most prestigious areas of major cities in Spain, particularly Madrid and Barcelona.
During the real estate boom, Renta Corporación created subsidiaries in different European countries and in the United States, aiming to transfer to these countries the successful model it had already developed in Spain. These foreign subsidiaries have now become almost inoperative because, since the financial crisis, Renta Corporación has focused on its activities in Spain, where it can gain the most benefit from its knowledge of the market. Taking advantage of the declaration of insolvency by the Spanish companies in the group led by Renta Corporación, we applied to the court hearing the insolvency proceedings for the parent company and its Spanish subsidiaries for a declaration of insolvency for all the other subsidiaries located in European Union countries where Council Regulation (EC) 1346/2000 on insolvency proceedings (the “European Insolvency Regulation”) applies. We had to show that these companies’ centre of main interests (COMI) is in Spain, as they do not have assets in the countries where they are registered and their interests are administrated from their parent company, which has its registered office in Barcelona.1 As the foreign subsidiaries have almost no assets, as well as applying for a declaration of insolvency, we also applied for the proceedings to be shelved due to insufficient assets under sections 176.1.3 and 176 bis of the Insolvency Act. Barcelona Commercial Court No. 9, which assumed jurisdiction to declare the insolvency of Renta Corporación’s foreign subsidiaries, declared their insolvency and ordered the proceedings to be shelved due to insufficient assets, allowing the quick and efficient wind-up and liquidation of the companies making up the group’s international structure.
MULTI: FINANCIAL RESTRUCTURING AND INSOLVENCY PROCEEDINGS CONCLUDED DUE TO REMOVAL OF CAUSE OF INSOLVENCY
Madrid Commercial Court No. 11 handed down an order on April 23, 2013, ending the insolvency proceedings of MULTI VESTE ESPAÑA 1, S.L.U. (“Multi”), as the company was no longer in a situation of insolvency, under section 176.1.4 of the Insolvency Act. This section of the Insolvency Act establishes that “insolvency proceedings may be concluded at any stage if all recognised credits have been paid or secured, or all creditors have been satisfied in full in any other way, or where the situation of insolvency has ceased to exist.” Cuatrecasas, Gonçalves Pereira advised a member of the banking syndicate in these proceedings.
Multi, which owns a shopping centre in La Coruña, declared voluntary insolvency on March 27, 2012, when it was unable to reach any other solution satisfactory to all concerned. The parties continued to negotiate within the framework of the insolvency proceedings, seeking a long-term solution that would ensure the company’s viability and return to solvency. The critical factor for the restructuring was the removal of the cause for insolvency. This was done by making funds available to pay in full the insolvency creditors holding due and payable credits until the date the restructuring agreement was signed, as well as all creditors holding credits for specific amounts on the final list issued by the receivers. To do this, Multi, its shareholders and the banks signed a financial restructuring agreement on February 12, 2013, amending the current terms of the bank financing to adapt it to the new business plan, which included extending the maturity date and establishing new tranches with different remuneration terms for each tranche, based on the nature of the company’s operations.
After verifying compliance with certain conditions precedent for the restructuring, and revising the company’s business plan for 2013-2016, the receivers issued a report stating that Multi was no longer insolvent, and the insolvency could be concluded under section 176.1.4 of the Insolvency Act.
On April 23, 2013, the court handed down an order declaring the insolvency proceedings over and lifting all restrictions on the debtor’s capacity to administer its funds.