Corporate Restructuring Laws Under Stress: The Case of Spain

Abstract

The COVID-19 crisis caused an unprecedented global disruption of economic activity, which was especially intense in Spain due to the nature of its economy. Many legal and institutional reforms were adopted, and extraordinary economic measures implemented. As interim reforms are lifted and economic incentives wear off, Spain will need to grapple with the economic damage caused by the pandemic. Arguably, the reform of the insolvency system recently approved, which precedes and is independent of the measures enacted to stave off risks caused by the pandemic, provides an enhanced and improved framework to deal with business insolvency. Spain now counts on a state-of-the-art hybrid restructuring system and a modern regulation to deal with the financial and economic distress of micro enterprises.