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Main measures in relation to COVID-19 adopted by Royal Decree Law 8/2020

| COVID-19 | Restructuring and Insolvency

Regarding Royal Decree-Law 8/2020 on urgent extraordinary measures to deal with the economic and social impact of COVID-19

The Spanish Government has approved the 17 March Real Decreto-ley 8/2020, approving urgent extraordinary measures to deal with the economic and social impact of COVID-19.

The regulation, which comes into force when it is published in the BOE on March 18, contains measures of different types and scope aimed at mitigating the effects on the production structure, demand and citizens caused by the health emergency caused by the COVID-19 pandemic and will be in force until April 18th, unless a different deadline is set for any of them.  This deadline may be extended by the Government by Decree-Law if necessary.

The following are the measures of flexibility included in the Royal Decree-Law 8/2020, in its article 43, regarding the period of time of the duty to apply for the insolvency proceedings.

The deadlines affected by this regulation are as follows:

Suspension of the obligation to submit the request for competition during the State of Alert

For the application for voluntary bankruptcy, Article 43.1 of Royal Decree Law 8/2020, provides that while the state of alert is in force, the debtor who is in a state of insolvency will not have the duty to apply for a declaration of bankruptcy.

For the necessary insolvency proceedings, the aforementioned precept provides for the non-admission for processing by the Judges of the applications for the necessary insolvency proceedings that have been filed during the State of Alarm, or that are filed until two months have elapsed since the end of the State of Alarm. If an application for voluntary competition has been submitted, it will be admitted for processing, with preference, even if it is submitted at a later date.

Suspension of the deadline in Article 5a(5) of the Bankruptcy Law

While the state of alert is in force, the debtor who has made the notification provided for in Article 5 bis of the Bankruptcy Law will not have the duty to request the declaration of bankruptcy, even if the period provided for in paragraph five of that provision has expired.

We hope the information is useful and of your interest. At Andersen Tax & Legal we have created a multidisciplinary team to attend to all the questions that may arise on this aspect or in relation to the COVID-19.

You can download the full document here.

For more information please contact:

Javier Mata | Partner of the bankruptcy area

Ana Ferrando | Director at the Litigation area

Olga Andrés | Lawyer of the Litigation area

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