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The new Bankruptcy Mediator

The recent Entrepreneurs Act (passed by Government Law 14/2013) incorporates a new figure, the bankruptcy mediator. This figure becomes part of the bankruptcy scheme when, prior to the declaration of bankruptcy, companies attempt an Extrajudicial Payment Agreement. The legislator’s goal was to dejudicialize bankruptcy and to establish the necessary tools to avoid slow and tedious bankruptcy proceedings, through the achievement of a resolution for the debtor – creditor conflict without going before the Mercantile Courts.

Despite the lack of a Regulation governing the bankruptcy mediator – it is expected to be passed in the upcoming months – the Act clarifies the basics in order to define it. Pursuant to article 233 of the Bankruptcy Act (hereinafter BA), it is stipulated that in order to be a bankruptcy mediator, the person shall fulfil the conditions already included in Act 5/2012 of Mediation in Civil and Commercial Matters, and the requirements specified to the receivers by the BA. Moreover, in accordance with Article 232 of the BA, it is the debtor interested in petitioning an Extrajudicial Payment Agreement who should request the bankruptcy mediator intervention, whose naming will be made by the Mercantile Registry where the debtor resides, if he is an entrepreneur or a company, or by a Notary Public in other cases.

The functions assigned to the mediator by the Entrepreneurs Act shows the conciliatory aura with which the legislator intended to provide this figure. Essentially, once the credits and theirs amounts are listed, the bankruptcy mediator calls the debtor and the creditor for a meeting where an extrajudicial payment agreement will be attempted and which should take place within the two months after the acceptance of his role as the bankruptcy mediator. In addition, within 20 days prior to the meeting, the mediator shall provide the creditors with a payment plan containing the conditions for such negotiating proposal. Furthermore, it is remarkable how the legitimacy with which the wording of new Article 3.1 endows the mediator to apply for a declaration of bankruptcy, which, until the moment, was solely a debtor and creditor’s right.

Nevertheless, the appearance of this figure has awakened positive but also negative opinions. One of the biggest controversies that have arisen is that if the extrajudicial agreement does not take place and the company is declared in bankruptcy, the mediator becomes the receiver of the company. As a consequence, it has generated doubts about the impartiality and confidentiality of the bankruptcy mediator, although it is true that the new Article 242 of the BA precludes any additional compensation to the mediator when, in case of declaration of bankruptcy, he becomes a receiver. In this regard, the eighth additional provision of BA stipulates that bankruptcy mediators’ fees are calculated in accordance with the fees previously established by the Bankruptcy Act 38/2011 for receivers.

In brief, the bankruptcy mediator is presented as a figure which still needs to be thoroughly defined but, to a great extent, linked to the receivers. The difference lies on the role entrusted to the mediator, which is to obtain payment agreements between debtors and creditors and, as rapidly and as efficiently as possible, to satisfy all possible debts, to avoid bankruptcy of the company and to ensure the business continuity.

Nowadays, the current inexperience on this procedure leaves uncertainty about whether such assimilation will be positive or negative in order to achieve the goals launched by the Act 14/2013. Therefore, it remains to be seen whether the practical implementation of this figure – the bankruptcy mediator – into insolvency situations, will satisfy the business crisis occurring in our country.

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