Court and insolvency measures to deal with the COVID-19 crisis

Automatic summary, not yet reviewed

1. Until June 20, 2021, trials, hearings and other court proceedings will be held preferably by video conference. In criminal cases, however, the defendant must be physically present in trials for serious crimes or when pretrial detention or a prison sentence over two years is requested.
2. Public service at courts and prosecutor's offices is provided by video conference, phone or email, and an appointment is needed to go in person. Public access to hearings is limited and wearing robes is waived.
3. Procedures arising from the crisis are handled on a priority basis: challenges to temporary layoff plans (ERTEs), dismissals, mortgage and rental moratoriums, denied public aid, and civil registry procedures, among others.
4. On insolvency matters, the duty to file for insolvency is postponed until December 31, 2020, and courts will not accept creditor-initiated insolvency petitions filed since March 14, 2020. Debtors may also modify court-approved agreements and refinancing deals.
5. Companies do not count their 2020 losses for the purpose of the dissolution ground based on losses, giving them time to restructure their debt and recover.
6. A single electronic Judicial Edict Board is created, published by the State Official Gazette Agency, replacing notice boards and official gazettes. Publications and searches will be free and it applies from June 1, 2021.

Who it affects

• Citizens who go to courts or prosecutor's offices: They will be served by video conference, phone or email and need an appointment to go in person.
• Workers and companies with temporary layoff plans (ERTEs) or dismissals: Their cases are handled urgently and on a priority basis.
• Companies and self-employed people in financial trouble: They get more time to avoid insolvency, modify agreements or refinancing deals, and do not count 2020 losses for dissolution.
• Tenants of their main home in financial hardship: They have more time to request a deferral of rent payments and can access temporary financing aid.
• Self-employed workers: They can access their pension plans if their billing drops by at least 75% due to the crisis, without stopping their activity.

Words worth knowing

Concurso de acreedores (insolvency proceeding)

Court procedure for when a company or person cannot pay their debts, and their assets are distributed among creditors.

Expediente de regulación temporal de empleo (ERTE, temporary layoff plan)

Mechanism allowing a company to temporarily suspend contracts or reduce working hours.

Convenio concursal (insolvency agreement)

Agreement between the insolvent company and its creditors to pay debts and avoid liquidation.

Acuerdo de refinanciación (refinancing agreement)

Deal between a company and its creditors to restructure debts, for example by deferring payments.

Edicto (edict)

Court notice published publicly when a person cannot be notified directly.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries