On 26th February we held a master seminar on Key Aspects of Insolvency at the offices of the Spanish Chamber. It was organised in collaboration with Quabbala, a member company of the Chamber.
Quabbala Limited, an international brand with Spanish origin, is an insolvency and corporate advisory firm based in the City of London, they are also present worldwide throughout the network of international branches.
Our Secretary General, Igor Urra, had the pleasure to give a warm welcome to all attendees on behalf of our institution as well as an introduction to the lecturers: Claire Buijs and Rubén García-Quismondo Pereda.
They provided attendees with a general framework on Insolvency Law in the United Kingdom. The situation of insolvency happens when individuals or businesses have insufficient assets to cover their debts. There are two types of tests to identify it: the balance sheet test and the cash-flow test. Our speakers went through different procedures companies can implement to face this situation:
–Company Voluntary Arrangement (CVA), a flexible procedure consisting of a mutual agreement between the company and the creditor with the aim of returning the company to solvency and generating cash to pay debts.
–Administration (ADM), a more practical and fairly new procedure led by Insolvency Practitioners with the main purpose of rescuing the business but that often finishes in the liquidation of the company.
–Creditors Voluntary Liquidation (CVL), a formal insolvency process that is addressed to companies that have no choice to being rescued.
Later on, Rubén García-Quismondo introduced a very popular procedure in the UK, more flexible and creative than those previously mentioned: “Scheme of Arrangement”. It is an agreement between the company and the creditors, which adds value, for not applying general procedures but being treated and analysed case by case.
Furthermore, they made a comparative overview between the British and Spanish insolvency systems. They highlighted the fact that in the Spanish system most procedures are led by the Courts unlike the UK, where Insolvency Practitioners play a more significant role in the process; clients can approach, evaluate and select them. What’s more, in this country there is a “rescue culture” designed to save business, whereas in Spain, most companies going into liquidation have already terminated their business.
Our delegates found the tips our speakers gave to identify the signs that could show their business might be exposed to insolvency very valuable and useful.
These made us realised that when business P&L starts to get weaker we should also start becoming more alert. They confirmed this by explaining the main risks associated with insolvent customers. Providing some recommendations that might help our business to keep sound, such us maintaining a tight credit control policy or tips to maximise the return from insolvent customers, were highly appreciated by our attendees.
At the end of the seminar and after the Q&A, the participants had some time to mingle and discuss about their key learnings while enjoying a nice breakfast. We would like to thank all attendees of the seminars for their active participation as well as the team of QUABBALA who made a fantastic job.
Last but not least, we encourage you to keep updated on all the activities of the Spanish Chamber by visiting our UPCOMING EVENTS section.