Spanish Insolvency was entirely redrafted and modernized in 2000. Since then, it has suffered several amendmends to adjust it to new circumstances derived from the financial crisis which in Spain occurred in 2012 and more recently to the serious impact of Covid 19 on the Spanish economy. The changes brought about by Covid 19 have been in essence a moratorium in the filing of insolvency which has been finally lifted since 30 June 2022. This moratorium led to a number of companies to continue trading while insolvent (“zombies”). In May of this year the government approved a consolidated text of the Insolvency law which has introduced certain significant changes. However, Spanish insolvency continues to be inspired in the continuation of troubled businesses which is not surprising in a country with a relatively high unemployment rate. The main tenets of the recast law is a more clear distinction between pre insolvency negotiations and the actual procedure of insolvency which starts with the issue of insolvency court order, a new abridge regime for micro business with simplifies rules and shortens time lines and clarifications in the majorities in restructuring which will favor facing banks.
Summing up, Spain will be continue to be a debtor protective country according to the classification of Professor Philip R. Wood (“ Law and Practice of International Finance”, edit. Sweet & Maxwell , 2006) , but with a new regime for small companies, which are the bread and butter of the Spanish economy, will indirectly favor bank financing and finance creditors.