Unidad Productiva

The acquisition of the Production Unit in the Bankruptcy Procedure

The acquisition of the Production Unit in the Bankruptcy Procedure is a new form of investment. Or at least, it seems to be. Acquiring companies that are in a Bankruptcy Procedure has become a real opportunity for the acquirer.

The acquisition of the Production Unit in the Bankruptcy Procedure it can even lead -in an extraordinarily rare way- to save a company in a Bankruptcy Procedure.


Our Bankruptcy Procedure Law grants special protection to certain restructuring or refinancing agreements, prior to the ruling of Bankruptcy Procedure. It therefore incorporates certain requirements for such agreements to be reached. For example, the agreement must be adopted by 3/5 of the liabilities. Or that there is a favourable independent expert’s report, and that it is notarised.

Such an agreement will be shielded from the rescission actions included in the Bankruptcy Law itself (Article 71).

This regulation has proven to be an unquestionable failure. It is important to be noted that throughout Spain, barely ten refinancing operations have been carried out under this regulation. Perhaps this is why an urgent change is being made at this time.

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Legal Framework

We now proceed to set out the legal framework. The regulation may differ. This is due to the method used for the acquisition of a production unit in companies ruled in Bankruptcy Procedure.

Acquisition through business restructuring with a creditors’ agreement.

It involves acquisition through the application of one of the procedures provided for in the Structural Amendments Law. That is, through the merger, spin-off, etc. Articulating such a restructuring operation through a creditors’ agreement.

It should be borne in mind that the Bankruptcy Procedure Law does not contain specific regulations on this issue. Nor is there any relevant background.  This generates certain uncertainties in relation to the fit of such restructuring procedures, essentially in terms of deadlines, the existence or not of a right of opposition by creditors, the need for reports by independent experts…

This type of operation therefore fits into the framework of a Bankruptcy Procedure. However, at the moment, they do not have a right solution that can generate a certain comfort.

Acquisition through takeover agreement

The assumption agreement is regulated in Article 100.2 of the LC. It establishes the possibility of acquiring production units under the terms established in the agreement itself. These terms refer to the credits and obligations to which the production unit acquired is linked.

The purchaser undertakes both to pay the loans and to continue the business activity of the acquired production unit.

The following is relevant to the payment of the loans.  The payment will be made according to the configuration of the agreement.  That is, with its corresponding removal and/or wait.

 Acquisition of production units in common phase

This type of acquisition is regulated in article 43 of the LC.

With the Bankruptcy Procedure Law amendment, the sale of the production unit was allowed, a priori, as an exception.

The current law does not contemplate the sale procedure at this stage of the Bankruptcy Procedure.  Therefore, such procedure will be decided to the loyal knowledge and understanding of the judge, who will establish the rules to be followed.

One of the most relevant issues in the acquisition of production units in this phase is linked to seizures. Specifically, with respect to the operation of the seizures that are held prior to the Bankruptcy Procedure’s ruling.

The Bankruptcy Procedure Law allows the bankruptcy judge to lift certain seizures. These must be attached prior to the ruling of the Bankruptcy Procedure. In addition, it must prevent the debtor from continuing his activity.  With the exception of administrative seizures (Article 55.3 LC).

In view of the above, the following questions must be asked: What happens to assets seized by the administration that are transferred in the common phase?  All of this on the basis that they are part of a certain production unit.


Can those seizures be lifted or not ?

In view of the tendency followed by the majority of judges today, such seizures will be lifted.  This is, as long as the administrative credit in question does not have a special privilege. In other words, if the property in question is enforced separately, the seizures will be lifted at the liquidation stage.

What then prevents their lifting prior to liquidation in case of sale of the Production unit?

Apart from the above, we make the following consideration regarding the common phase. It is relevant since it has to do with the lack of a specific regulation for the sale of production units.

Therefore, there is no obligation on the part of the purchaser to assume the debts and commitments that the debtor carries forward.

Acquisition of production units in the liquidation phase

The acquisition of any production units in the Bankruptcy Procedure’s liquidation phase will be made free of charges and encumbrances. Furthermore, it must be done in accordance with the rules established by the Receivership in the judicially approved liquidation plan.

If the liquidation plan is not approved, the transfer may take place through a public auction.


In summary, the acquisition of the Production Unit in the Bankruptcy Procedure can be an excellent investment opportunity. Although, like any investment, the risk is present. And among others, we highlight the lack of regulation.

Within the scope of the common phase of the Bankruptcy Procedure there is certain legal uncertainty due to the lack of regulation. However, it could play in the investor’s interest, provided that clear rules are established for the acquisition.  Either through the receivership or through the Bankruptcy Procedure Judge. And with exact determination of the object, assets and associated charges, purchase process, etc.

In the same way, the investor has a clear advantage in the acquisition of production units in the liquidation phase.  Because not only the acquisition will be made at a very low price.  But also, the productive unit will have already adapted its structure.  It will also be acquired free of debts and charges. Finally, the operation will be articulated through a regulated procedure, either in the liquidation plan or legally.

If you liked this article, we suggest the following reading:

Purchase of Real Estate in a Bankruptcy Procedure