The numbers speak for themselves: in Spain, bankruptcy mediation has experienced unprecedented exponential growth in 875% over the last year, going from 78 procedures to 683 registered, according to data provided by the Association of Economists of Alicante.
This increase in cases referred to bankruptcy mediation has occurred due to the various modifications to the Bankruptcy Law of 2013, with the aim of incorporating alternatives to avoid bankruptcy proceedings for companies, such as refinancing agreements and mediation. Some autonomous communities, such as Catalonia, register up to 26% of bankruptcy mediations.
With this increase in the number of bankruptcy mediations and refinancing agreements, there is a parallel decrease in applications for bankruptcy proceedings (which in 2013 exceeded 9,143 and in 2015 the figure was reduced to 4,000).
The decrease in bankruptcy proceedings does not represent an economic recovery, but rather that more and more companies in the red are choosing to resort to mediation, with greater guarantees of recovery and continuity.
What is bankruptcy mediation?
Bankruptcy mediation could be defined as a procedure whose purpose is to reach an extrajudicial payment agreement with a company's creditors, and thus avoid its closure, being an alternative to the bankruptcy procedure itself to solve the insolvency situation of a company.
The profile of companies that reach the refinancing agreement is usually that of a medium-sized company, located in an urban center, belonging to the construction, industrial, real estate or wholesale sector and with a limited company structure.
The importance of bankruptcy mediation for small and medium-sized companies is evident: it is an ideal option for those companies that do not want to go through the slowness and costs of ordinary judicial administration, being able to carry out a payment plan and obtain refinancing that guarantees the viability of the company and the maintenance of the activity in the event of small insolvencies.
