1. Legal Framework - Texto Refundido de la Ley Concursal (TRLC) - RDL 1/2020 as amended by Ley 16/2022

A. Acciones de Reintegración - Avoidance (Art 226-238 TRLC)

Presumption: Any act done in 2 years before declaration of concurso that is detrimental to active mass (perjuicio para la masa activa) is rescindable, even if no fraudulent intent.

No need to prove fraud - Only need to prove detriment.

Iuris et de iure presumptions of detriment (Art 228 TRLC) - Automatic avoidance:

1. Gratuitous acts (donations) - except small customary gifts
2. Payments of unmatured obligations (pago anticipado) in 2 years
3. Creation of securities (garantías) for pre-existing debts in 2 years
4. Acts between related persons (partes vinculadas) - e.g., director, family company

Iuris tantum presumptions (rebuttable):

• Acts for consideration with related party
• Securities created at same time as debt but for related party

Result: Act declared ineffective, asset returned, or if asset gone, value to be paid. Counterparty is placed as creditor.

B. Concurso Culpable - Culpable Insolvency (Art 442-455 TRLC)

Concurso is declared culpable if generation or aggravation of insolvency was due to dolo o culpa grave (intent or gross negligence) of legal representatives.

Art 443 - Presumptions iuris et de iure of CULPABLE (automatic):

1. Non-compliance with accounting duties - No accounts, double accounting, irregularities
2. Double accounting / false documents
3. Non-filing for concurso when obliged (Art 5 - within 2 months of knowing insolvency)
4. Failure to collaborate with concurso administration
5. Asset stripping - exit of assets in fraud of creditors

Art 444 - Presumptions iuris tantum (rebuttable) of CULPABLE:

1. Non-compliance with filing annual accounts
2. Failure to request liquidation when grounds exist
3. Failure to comply with agreement (convenio) due to own fault

Art 455 - Effects of Culpable:

• Inhabilitación de administradores - Ban 2-15 years to manage others' assets
• Pérdida de créditos como acreedores concursales (their credits become subordinated)
• Responsabilidad por déficit concursal (Art 456) - Most important: Directors can be condemned to pay ALL or PART of deficit (credits not paid in liquidation) with their personal assets. No limit.
• Damages.

C. Acción de Responsabilidad Civil under LSC Art 236-241

Even if concurso not culpable, director can be liable under Corporate Law for acts that caused insolvency - Negligent management.

2. Director Liability - When Personal Assets at Risk?

Directors covered: De jure administrators, de facto administrators (administrador de hecho), general directors (director general), shadow directors.

Liability triggers in Avoidance Context:

Director authorizes detrimental act in 2 years - e.g., Sells property to his wife's company at 50% value, pays dividend when company insolvent, repays loan to himself before others, creates mortgage for old debt to favor one bank.

Two liabilities arise:

1. Transaction is rescinded (reintegración) - Asset returns
2. If that act caused concurso culpable - Director pays deficit

Key reform Ley 16/2022 - Early Warning:

Art 5 bis TRLC: Director must file for concurso within 2 months of insolvency knowledge, unless files communication of opening negotiations (pre-concurso - 3 months extension). Failure = automatic culpable under Art 443.6.

Also introduced Business Judgment Rule defense - Director can avoid liability if proves acted with diligence, informed, in good faith, trying to avoid insolvency.

3. Landmark Case Laws - Spanish Supreme Court and Provincial Courts

A. STS 614/2022, 28 Sept 2022 - Supreme Court - Culpable por Retraso en Solicitar Concurso (Most Cited Since Reform)

Facts: Administrator knew company was insolvent since Jan 2018 (negative equity, unpaid Social Security), filed concurso in Sept 2018 (8 months later).
Supreme Court: Confirmed concurso culpable under Art 443.6 (now Art 444). Duty to file within 2 months is strict. Defense "we were negotiating refinancing" rejected because did not file pre-concurso communication (Art 5 bis). Condemned director to pay deficit of €1.2M personally under Art 456.
Principle: 2-month rule is absolute. If negotiating, you MUST file communication.

B. STS 89/2023, 8 Feb 2023 - Supreme Court - Acción de Reintegración - Pago a Parte Vinculada

Facts: Company in 2 years before concurso paid €400,000 to company owned by administrator's brother, for alleged old loan without due date. No consideration.
Provincial Court rescinded under Art 228.2 (payment of unmatured obligation + related party).
Supreme Court confirmed: Even if loan existed, payment before maturity in suspect period is presumed detrimental iuris et de iure. No need to prove fraud. Administrator tried to argue it was ordinary business. Rejected because related party.

C. STS 246/2021, 28 April 2021 - Supreme Court - Venta a Precio Vil (Sale at Undervalue)

Facts: 18 months before concurso, company sold industrial warehouse valued at €1M to director's own SL for €400k. Director claimed market downturn.
Supreme Court: Held clear perjuicio - Sale at 40% value = gratuitous part = rescindable. Applied Art 226 - detriment assessed objectively, not intent. Also declared concurso culpable because asset stripping under Art 443.5. Director condemned to return warehouse + pay deficit.

D. STS 396/2022, 9 June 2022 - Supreme Court - Dividendos en Situación de Insolvencia

Facts: Company distributed €300k dividends 1 year before concurso when accounts showed losses and negative working capital.
Supreme Court: Dividend distribution when company insolvent = gratuitous act and detrimental - Art 228.1. Rescinded. Directors liable under Art 236 LSC + Art 456 TRLC - Gross negligence - Distribution against duty to conserve assets when insolvency foreseeable. Personal liability for amount of dividend + part of deficit.

E. STS 472/2019, 9 Sept 2019 - Supreme Court - Garantías Intragrupo - Upstream Guarantee

Facts: Parent company in financial difficulty made subsidiary grant mortgage to secure parent's bank loan (no benefit to subsidiary). Subsidiary later in concurso.
Supreme Court: Held guarantee without countervalue = detrimental gratuitous act under Art 228. Rescinded mortgage. Established doctrine: Intra-group guarantees without direct benefit to guarantor are presumed detrimental.

F. SAP Barcelona 15ª, 21 March 2023 - Administrador de Hecho Liability

Facts: Person not registered as director but acted as such - negotiated with banks, gave instructions.
Court: Held as administrador de hecho - Liable for culpable concurso and deficit. Extended liability to shadow director. Very important after 2022 reform - Art 455 now expressly includes de facto directors.

G. STS 501/2022, 13 July 2022 - Supreme Court - Contabilidad Deficiente = Culpable Automático

Facts: Company did not deposit annual accounts for 3 years, no inventory.
Supreme Court: Art 443.1 - Failure to keep orderly accounting = automatic culpable, no defense. Even if company would have gone bankrupt anyway. Inhabilitación 5 years + deficit liability.

H. SAP Madrid 28ª, 14 Oct 2022 - Business Judgment Rule Defense Accepted - Post Reform

Facts: Directors continued trading for 4 months after insolvency while seeking investor, kept detailed minutes, hired advisor, filed pre-concurso communication.
Court: Acquitted - Not culpable. Applied new Art 5 and Business Judgment Rule (Art 226 LSC). Directors acted diligently to avoid concurso, not aggravate. First case where BJR defense worked in concurso context. Shows importance of documentation.

I. STS 123/2020, 2 March 2020 - Supreme Court - Refinanciación Protegida vs Reintegración

Facts: Bank received repayment under refinancing agreement homologated (protected) 1 year before concurso. Administrator concursal tried to rescind.
Supreme Court: Refinancing agreements homologated under Art 71 bis old (now Art 635) are immune to reintegración if meet requirements (51% financial creditors, viability plan, independent expert). Protects banks. But if refinancing not homologated, repayment rescindable.

J. Audiencia Provincial de Valencia, 9ª, 2023 - Compensación de Créditos con Parte Vinculada

Facts: Director set off his credit against company debt to him 6 months before concurso.
Court: Set-off in suspect period with related party = Art 228 - Presumed detrimental, rescinded. Director must return money and claim as subordinated creditor.

4. Practical Consequences - What Directors Must Do in Spain (2026)

To Avoid Reintegración:

• No payments to related parties in 2 years if insolvent or near insolvent
• No creation of securities for old debts
• No sale below market value - Get independent valuation report
• No dividend if negative equity or cash flow test fails

To Avoid Culpable and Personal Liability:

1. File Pre-concurso Communication (Art 585 TRLC) within 2 months of insolvency - This gives 3 months protection + extra. This is most important.
2. Keep accounting perfect - Deposit accounts on time in Registro Mercantil
3. Minutes of Board - Document that you sought legal advice, viability analysis
4. Do not use company assets for personal
5. If insolvent, do not incur new debts without viability

Liability Amount:

• Deficit liability (Art 456) can be entire unpaid debt - e.g., Company owes €5M, assets €1M, deficit €4M - Director pays €4M personal. No cap. Can be joint and several among multiple directors.
• Courts can moderate - If multiple causes, may condemn to 50% of deficit.

Statute of Limitations:
Reintegración - 2 years from declaration of concurso to file, but acts looked back 2 years before.
Culpable - Qualification section opens after common phase, 10 days to present report.