The Spanish Corporate Restructuring Act: International Investors Need to Know

The entry into force of Spain's Corporate Restructuring Act has introduced significant changes to the legal framework governing insolvency and debt restructuring proceedings. For international investors and companies operating across the Spain-Latin America corridor, understanding these developments is essential.

A shift towards preventive restructuring

The new framework places greater emphasis on pre-insolvency tools, allowing distressed companies to negotiate restructuring plans with creditors before formal insolvency proceedings are triggered. This shift mirrors the EU Restructuring Directive and brings Spain in line with best practices across European jurisdictions.

For cross-border transactions, this means earlier intervention is now not only possible but actively encouraged — reducing the risk of value destruction that typically accompanies formal insolvency.

Key implications for creditors

Secured and unsecured creditors now operate within a more structured hierarchy, with enhanced protections for new financing provided during restructuring. The cram-down mechanism has also been broadened, allowing restructuring plans to bind dissenting creditor classes under certain conditions.

What this means for your operations

Companies with exposure to Spanish entities — whether through debt, equity or commercial contracts — should review their contractual protections in light of these changes. Early legal advice is critical: the window for effective intervention narrows significantly once formal proceedings begin.

Mirlo Legal advises clients on restructuring and insolvency matters across Spain and Latin America. If you have questions about how these changes may affect your business, contact our team.