The treatment of ICO (Official Credit Institute) loans in the insolvency and pre-insolvency framework has undergone significant evolution in recent years. Initially regulated by Royal Decree-Law 8/2020, of March 17, as a response to the COVID-19 crisis, their regime has been progressively refined through successive legislative measures. Law 16/2022, of September 5, which amended the Consolidated Text of the Insolvency Law, introduced a specific regulation for these loans in its Eighth Additional Provision. This provision establishes criteria regarding their classification, representation, and scope within insolvency and pre-insolvency proceedings.
Legal Nature and Classification
ICO loans exhibit a hybrid nature that complicates their classification within restructuring plans. On one hand, they are financial loans granted by private entities; on the other, they benefit from the public guarantee of the ICO. This duality has led, in practice, to certain prerogatives that align them closely with public claims.
Voting Rights in Restructuring Plans
Section 7 of the Eighth Additional Provision of the Consolidated Text of the Insolvency Law (TRLC) regulates the exercise of voting rights of these loans in restructuring plans. A separate voting system is established: the financial entity votes for the non-guaranteed part, while the guaranteed part requires prior authorization from the State Tax Administration Agency. This prior authorization regime has been subject to criticism for its potential obstructive effect on the approval of restructuring plans. However, recent regulatory amendments, such as Royal Decree-Law 20/2022, have made the system more flexible, allowing separate voting by financial institutions even in cases of ICO drag-along (cross-class cramdown).
Class formation in restructuring plans
A controversial aspect is the formation of classes of creditors in restructuring plans that include ICO credits. A pioneering decision of the Commercial Court No. 1 of Oviedo, dated July 13, 2023, issued in the context of the approval of the restructuring plan of Alimentos El Arco, S.A., has allowed the separation of ICO credits into an independent class, arguing the “lack of common interest” with other financial credits and the “conflict of interest” between public and private debts. This judicial decision is based on the flexibility granted by article 623 of the TRLC for the formation of classes, beyond the mandatory criteria such as the bankruptcy rank or the existence of real guarantees.
Conclusions and future prospects
The special regime for ICO loans in restructuring plans seeks to balance the protection of public credit with the need to facilitate business viability. However, the complexity of its regulation and the constant normative modifications generate certain legal uncertainty. The recent relaxation in the judicial and administrative interpretation of this regime points towards greater agility in restructuring processes. However, there is still a need for a clearer and more stable regulatory framework that allows companies and their creditors to plan their restructuring strategies with certainty. In short, the treatment of ICO credits in restructuring plans is a paradigmatic example of the tension between the public interest and the need for agile corporate restructuring mechanisms, a balance that the legislator and the courts will have to continue to refine in the coming years.
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