CORONAVIRUS: Insolvency and Business Recovery

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CORONAVIRUS: Insolvency and Business Recovery

2020-04-17

This legal note follows the entry into force of Law 1/2020 of 31 March to ratify Presidential Decree 11/2020 of 30 March, which declared a state of emergency due to the public health crisis. The state of emergency applies to the whole country and has a duration of 30 day.

Besides the human consequences of Covid-19, the virus also has economic consequences. The restrictions and containment measures implemented to prevent the spread of the Covid-19 pandemic are having a global impact.

The fact that many business activities operate as a chain means there could be widespread breaches of contractual obligations.

If companies anticipate that it will be impossible to comply with their obligations, or to comply with them on time, they should seek to justify their non-compliance in order to avoid claims of insolvency or other undesirable judicial actions

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