When the debtor is unable to meet their ordinary commitments, the next step is the declaration of insolvency proceedings (Concurso de Acreedores). During this process, the possible scenarios that may arise must be taken into account. One of the most common are the so-called Insolvency Incidental Proceedings (Incidentes Concursales).
That is, the procedure that must be followed for the insolvency judge to hear all those matters that arise during the insolvency proceedings, provided the law does not lay down a different handling. These are rather complex processes, so the advice of expert solicitors in this field will be of great importance for success in such cases. In any case, do not hesitate to contact BBMabogados if this is your situation.
What is an insolvency incidental proceeding in Santander?
To carry out the judicial process of insolvency proceedings, reference must be made to the Insolvency Act (Ley Concursal). Its main purpose is to provide the appropriate procedural legal framework so that the debtor can meet their obligations in an orderly manner and, where possible, overcome that stage of insolvency.
In this respect, the legislator created a single process designed to regulate this complex landscape that an insolvency proceeding entails. Now, multiple unforeseen situations may arise which need to be resolved.
For these cases, the law created the Insolvency Incidental Proceedings, defining them as the process by which the issues that arise during the insolvency proceedings and for which no other handling is provided will be heard. In this way, we find that the following matters will be dealt with:
– Those that do not relate to the declaration of insolvency.
– Those that are not related to the determination of the debtor’s estate.
– Those that do not concern the satisfaction of creditors’ claims.
Features of the insolvency incidental proceeding
Firstly, it is a declaratory process, as it involves a set of procedural acts that bring before the insolvency judge a conflict situation to be resolved within the insolvency proceedings.
On the other hand, it is a full proceeding (plenary), since it is resolved by judgment with the full effect of res judicata. In turn, it is special, as it operates only within the insolvency proceedings; that is, it does not affect actions outside the process.
When does the insolvency incidental proceeding apply?
As indicated, the law establishes that all those issues that arise during the insolvency proceedings, for which no other handling is provided, will be dealt with through the procedures of the insolvency incidental proceeding. Thus, we are presented with two types or forms depending on the subject matter of the disputed issue; let us look at each one.
INCIDENTAL PROCEEDINGS IN THE STRICT SENSE
The first type deals with insolvency matters in the strict sense, for example:
-The challenge of the insolvency administrators;
-Disputes arising from the set-off of claims once insolvency has been declared;
-Disputes concerning the termination of contracts pending performance;
-All issues relating to the recognition of claims, challenges to the inventory and to the list of creditors.
The above are only some of the matters that are the subject of this type of process; the range of options offered by the Act is much broader. Nevertheless, with this list we can get an idea of the variety of disputes that could arise during the course of the insolvency proceedings, which, without doubt, have the capacity to make the main insolvency process far more complex.
EMPLOYMENT-RELATED INSOLVENCY INCIDENTAL PROCEEDING
Now, the second type into which insolvency incidental proceedings can be classified aims to resolve purely employment-related matters that arise within the insolvency proceedings. This is known as the employment-related insolvency incidental proceeding.
In these cases, the aim is to resolve employment-related disputes arising within the insolvency proceedings. It is worth noting that, as a general rule, the regulation of insolvency incidental proceedings draws on civil and commercial principles. However, in employment-related insolvency incidental proceedings, it additionally draws on the principles of the social jurisdiction, as well as on the remedies specific to this field.
That being so, it is logical to conclude that this type of incidental proceeding, dealing with the sensitive matter of employment, is handled with particular care. Accordingly, the actions of the insolvent company’s workers against the order approving the collective termination or suspension of employment contracts are the most common in this category.
Who are the parties to the incidental claim?
Given that insolvency proceedings are a rather complex process and, moreover, these incidental matters may arise, it is normal for it to be confusing to identify the parties. On this point, it is worth noting that incidental matters begin with a claim; therefore, whoever brings it will be the claimant.
Meanwhile, the incidental defendant will be the parties against whom the claim is directed. Generally, these parties are the insolvent company or the insolvency administrators, depending on the dispute in question.
Finally, we can see that the insolvency process is not simple, which is why having the support and advice of solicitors specialising in this field will be of great importance, especially if one or more incidental proceedings arise during the course of the insolvency.
Economic criminal law in Santander
In reality, this type of system is part of criminal law in general, in which the aim is to establish the guilt and punishment of a person in relation to a given act. In any case, it must be borne in mind that once an allegedly unlawful act has been committed or incurred, it will need to be demonstrated and proven at trial, in which the right of defence of the accused or the person under investigation must be guaranteed.
Thus, the solicitor’s role in these cases is to ensure the defence of their client, with a view to proving their innocence or, failing that, obtaining the least severe conviction possible. Likewise, do not hesitate to contact us if you are going through any of the situations described above. Only in this way will we be able to design a procedural defence strategy tailored to your particular situation.
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