The voluntary bankruptcy Tremon Grupo Inmobiliario SA has motivated co cin S entencias the Supreme Court (24 April, 10 July October 23, October 31 and November 22, 2018 ) and a writ of inadmissibility ( December 19, 2018) that address the qualification as persons related to the bankrupt to the partners that participate in the companies belonging to the group of companies of the insolvent, as established in Article 93. 2.3º of the Bankruptcy Law (LC). Although the contest of the Tremon SA Real Estate Group was declared on December 4, 2008, and therefore the norms that the Supreme Court has applied have been in force at that time , the repertoire of judgments clearly illustrates two fundamental aspects in the matter: (i) the temporary moment to consider for the subordination of the credit, and ( ii ) the type of group of companies referred to in article 93.2 .3 of the Bankruptcy Law.

Regarding the first question, how is it peaceful , what devalues iuris et de iure credit is the link between creditor and debtor; in other words, the special knowledge of the financial situation of the insolvent of which they have , among other persons, their partners if the bankrupt is a legal person , except – in this last case – the credits different from the loans or acts with analogous purpose , which are those ” destined to the financing of the insolvent, either by the legal nature of the business (loans, credits, discount, leasing, etc.), or because, although the legal nature is not that of a financing business, a business whose economic purpose is the financing of the insolvent party is being concealed “, According to Sentence 125/2019 of the Supreme Court of March 1 , and among those who , according to the criteria postulated by Judgment 446/2018 of the Provincial Court of Madrid of July 20 , it seems to be also the postponement of the price in the purchases . Therefore , credits that were born before the creditor had acquired the status of a person related to the debtor will be subject to subordination.

Regarding the second question , the cited judicial decisions warn that – not since Law 38/2011, which refers to the definition of group of companies established by Article 42.1 of the Commercial Code – but from the very enactment of the same. Bankruptcy Law , the criterion to appreciate group of companies is ” direct or indirect control “, discarding the “management unit”; therefore, the subordination will operate for the credits of the companies belonging to a vertical or ” hierarchical ” group, and should be discarded for the companies belonging to a horizontal or “coordination” group.

In any case, having applied the original bankruptcy legislation , prior to the modifications introduced in Article 93.2.3º LC by (i) Royal Decree Law 3/2009, which appended “whenever these – the partners of the companies of the same group of the insolvent company – meet the same conditions as in number 1 of this section”, and ( ii ) the Law 38/2001 that added the qualifier of “common” to “its partners”, in such a way that the diction of the precept was as follows: «3.º The companies that are part of the same group as the company declared in bankruptcy and common partners, provided that they meet the same conditions as in the 1st number of this section ‘questions are not clear – for now – by case law. Such open questions are:

1st        Would the criterion – related to the prior nature of the credit to the specially related person status – be applicable to the “personal and unlimitedly responsible for social debts” partners, despite the fact that the wording of number 1 of art. 93. 2 LC seems toomit it expressly for such partners?

2nd        Why are the credits of “The companies that are part of the same group as the company declared in bankruptcy” (under the criterion of “direct or indirect control”) , and also those of the partners that own 5% or 10% of the insolvent company , being clear that these percentages do not provide the “control” of that? Is not it incongruent?

3rd        What is the reason why the precept includes the common partners, who are – in their own right – the partners of the bankrupt that meet the minimum requirements for participation in their capital established in number 1 of art. 93. 2 LC? Are not already said partners of the insolvent – ex iure proprio – considered persons related by said number 1; and therefore is not established by the number 3 a reiteration or redundancy?

Answer to the first question

S hile it is understandable that “ordinary members” have to have such a condition at the time of the birth of credit, as the ultimate reason for the subordination is precisely that partners financed the insolvent with knowledge of the situation, and – therefore – the subordination can not be imposed on the person who financed when he was not yet a member , such subordination requirement only reaches – in the 1st section – the capitalist partners, excluding the partners of companies of persons (with the exception of the limited partners) who are fundamentally what s , according to the law (Article 148 CCO) are personally and unlimitedly responsible for social debts.

It is not well understood, then, that exclusion of the necessary temporary element for the subordination of the credit of the capitalist partners, because the same reason (link of the partner at the time of loan) exists in a capitalist society as in a society of persons,because although in the latter there is not properly social capital, if there is a connatural “portion of interest” of the partners (Articles 140 and 143 CCO and Article 1689 CC).

Although the reason could be that civil and collective partners are born administrators of civil society (Article 1695 CC) , collective or limited (Article 129 CCO) , and therefore its subordination regime must match that of the members of the board of the company sestablished by Article 93.2.2º of the Bankruptcy Law, it remains true that the contractual regime societies can (i) exclude the condition of nato administrator of all partners, allocating such function to a specific partner or partners , or ( ii ) r indicates a system of decision-making by majority, therefore, exempt the member who voted against the decision to participate in the negative effects of social management. However , and n any case, it should also be agreed that credit managers non-members of equity capital companies against the insolvent debtor should also be excluded from subordination if they were born before holding such office , since, at such a time prior to their appointment, the subjective reasons that lead to devalue the credit.

In this line , the answer to this question can be found in the Sentences of the Supreme Court of March 4 , April 24, October 23 and November 22, 2018 , which address the subordination of capitalist partners in a sufficiently abstract manner. so that your reasoning can be transferred without problem to the personal partners . In effect, this jurisprudential repertoire clearly establishes that the concurrence of the circumstances that justify the consideration of a person specially related to the debtor makes more sense that it is referenced at the moment in which the legal act arises whose insolvency relevance is to be specified (the subordination of the credit), that to the later one of the declaration of bankruptcy, without making any distinction between the typology of the creditor partners. Therefore, the temporary criterion of activation of the subordination (moment of birth of the credit) predicable of the capitalist partners, should be applied to the personalist partners – and even to the administrators of the insolvent one – because there is identity of reason among all these assumptions

Answer to the second question

As stated in Sentence 125/2019 of the Supreme Court of March 1 , there is no identity of reason between the subordination of the credits of the partners and the subordination of the credits of the group companies. And if there is no reason identity, it is reasonable that the assumptions receive different treatment : while the basis of the subordination of credits of group companies is – basically – in which the credit of the insolvent company benefits the group and , therefore, , in its own benefit , the foundation of the subordination of the credits of the partners resides in the greater information or capacity of influence that these have (all this according to the aforementioned Judgment) .
However, and without prejudice to the respect that the High Court deserves, the reader will be warned that it will attribute influence capacity to a partner holding 10% of a non-listed company. to the point of subordinating your credit it is somewhat exaggerated,since the degree of participation – despite being significant – and remains minoritari or insufficient, inter alia, to ensure unlimited access to financial information society. And if we counterpose the limited participation allowed to a partner before subordinating itscredit , with the criterion of “control” that implies the direct or indirect possession of a significant portion – certainly more than 10% – of its social capital , we find in said excessive penalty des balance of the insolvent partner. And although it could be objected that the direct or indirect possession of the majority of the voting rights of the bankrupt does not exhaust the assumptions of “group of companies”, it is also true that, empirically, it can be verified that the power to appoint or dismissing administrators is closely linkedto the condition of the direct or indirect majority partner.

In sum, although a ratio legis could be appreciated different for the partners of the insolvent company and the companies of its group, the difference does not justify such a disparate treatment in the maximum percentage of participation in the bankrupt before being allowed to subordinate the credits. De lege ferenda would propose, then, the subordination (i) of the partner who directly or indirectly controls the insolvent party ; ( ii ) of the companies that are part of the same group as the insolvent company – which will necessarily be shared by the control partner – understood as the one that holds the direction of its operational and financial policy, or falls back in any of the circumstances indicated by article 42 of the Commercial Code ; and ( iii ) common partners that exceed the significant participation threshold, as will be explained in the following reply.

Answer to the third question

It is not easy to answer the reason why – in fact – what Article 93. 2.3º LC states is that the credits of the companies that are part of the same group as the company declared in bankruptcy and its partners will be subordinated. common , provided that thesecommon partners are already subordinated their credit for being related persons in their own right . This It is a reiteration or redundancy of difficult utility or explanation , since these “common” partners are only considered as related persons, if they are already related to article 93. 2.1º LC . Therefore declare persons related to the “common partners, provided that they meet the same conditions as in the 1st number of this section” tautology seems clear justification uncertain.

In the absence of real or judicial interpretation that illuminates the meaning of the provision,  may be followed would be applying compliance with the requirements of point 1 of paragraph not insolvent, but the company belonging to same group , hypothesis already advanced by QUETGLAS ( The bankruptcy of the group of companies , page 213) . In this case, the following would be considered to be specially related persons: the partners who exceeded the 5% and 10% share respectively in the company of the same group as the bankrupt and who – at the same time – maintained some participation in the insolvent company, however minimal it might be.

The legal reason behind the interpretation would be a composition of the reason for the subordination of credits of the partners of the bankrupt ( influence, information , with the criticism that has been made on this criterion in the answer to the second question) with a presumption of having such influence and information on the bankrupt one of its partners – even if not meet the thresholds of 5% and 10% stake in the insolvent – that reach at least those percentages in any other company of the group of the bankrupt.Exist, in this case, a rebuttable presumption in law that one partner which exceeds the percentages required in a group company of the insolvent, however distant that may result in the organization, and also has any stake in the insolvent itself, even if it is small, it deserves to be considered a person especially related because participating in the capital of more than one society denotes a link with the “policorporative enterprise ” more narrow and with more visions of permanence (partner insider ) than that owned byanother exclusive partner of a group company , even if both are minority .

In other words, whenever a partner of a company in the group of the bankrupt exceeds the legal limits of participation in it , the amount of any participation in the bankrupt itself – before the granting of the loan – would transmit the subordinate effects formerlyproper to the partners of the bankruptcy , for having also propagated the presumptions of influence and information of the bankrupt that the former have.

The proposed interpretation has to be contrasted with the jurisprudence relapsed on the subordination of credits owned by partners participating in group companies , and especially with Sentence 239/2018 of the Supreme Court of April 24 , which is particularlyillustrative of the ” partners c omunes “, although without explaining the meaning of the apparent redundancy:

  • Apparently, the proposed interpretation would be divergent from the jurisprudential justification of the requirement introduced by RDL 3/2009 that the “common partners ” of art. 93. 2.3º LC ” meet the same conditions as in number 1 of this section” , requirement , justification that is summarized in that

“Did not have í a sense make worse condition or na partners companies within the same group of the insolvent that members of the insolvent itself, inasmuch as the former not being required a certain percentage m í nimo of participation or n the law expressly exig I a in the case of partners of the insolvent “

However, this explanation is perfectly transferable to the participation of the “common partner” in the company of the insolvent group – not in the bankrupt company itself – to whom the reform also equates with the partners of the insolvent for the purpose of participation in capital (A certain threshold is required, be it 5% or 10%, both in the insolvent company and in any other company in the group) . In this way, the exceeding of said threshold in the group company, together with the taking of participation – whatever it may be – directly or indirectly in the insolvent company , could be valued as an external signal of special linkage of the creditor with the corporate group, with the usual presumption of information and influence, which would justify the subordination of your credit.

It should be added that the express admission of the “indirect” participation in the bankrupt (article 93.2.1º LC) would allow a member of an upstream company of the group of the insolvent party , which has a share of more than 10% may be “indirectly” a member of the insolvent company – which would meet the conditions of subordination – without having any direct participation (for example, when you own 10% of the parent company at 100% of the bankrupt).

  • On the other hand, the proposed interpretation is not misaligned purpose of reduction of the subjective scope of the subordination of credits, operated by Law 38/2011 , when introducing in art. 93. 2.3º LC the requirement that the members of the company of the same group be “common” , as expressed in the Judgment:

“However, it is not so clear that the requirement that it be a common partner, meaning that it was not only the company of the group of the insolvent, but also the latter, was implicit in the original drafting of the precept. It was convenient not to extend subordination to external partners indiscriminately, but it is not so clear, as in the previous case, that under the original wording the standard would like to reduce this extension by limiting it to common partners. “

The proposed interpretation does not stop reducing this subjective scope, although to a lesser extent than that which is inferred from the literal nature of the rule, which reduces the subordination to those partners that are already subordinated creditors by virtue of the overcoming, directly or indirectly. , of the legal thresholds foreseen (Article 93.2.1º LC), an interpretation that would turn out to be – by the exposed – a redundancy without apparent constructive utility.

In any case, the question remains open until the Supreme Court does not begin to resolve appeals corresponding to litigation arising from open competitions in which the current wording of Article 93. 2.3 LC is effectively applicable.

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