The bankruptcy without assets procedure, regulated under Spain’s Consolidated Insolvency Act (Royal Legislative Decree 1/2020), raises a critical issue: what is the scope of directors’ liability when a company lacks sufficient assets to even cover the costs of the insolvency process?
Originally designed to expedite the liquidation of non-viable companies, this procedure exposes key challenges, limited publicity, narrow timeframes for creditors, and the evidentiary difficulty of proving a causal link between management conduct and unpaid debts.
As analysed by our associate Ana Carpintero in an article published in El Derecho, Spanish case law makes it clear that a “bankruptcy without assets” does not automatically imply directors’ liability.
Read the full article here.
Access the Spanish version here.
