Creditors' contest

The Provincial Court of Madrid has confirmed that when a company enters into creditors' contest, the insolvency administration may demand the administrator to refund the amounts received if their position was unpaid according to the company's bylaws. In this case, the insolvency administration claimed the reimbursement of the remunerations received by the administrator, arguing that these payments harmed the company's active estate, that is, the funds available to pay the creditors.

 

The administrator defended himself by stating that he did not receive the money for being an administrator, but for other management functions, and also that all partners agreed with these payments. However, the court did not accept these arguments. It explained that, even if payments are justified under other concepts, if the functions performed are those of the administrator's position and it is unpaid, there is no reason to pay them separately. Furthermore, even if the partners have consented to these payments, this does not serve as an excuse when the company is in contest, because at that moment what matters is to protect the creditors' interests, not the internal agreements of the partners. Therefore, if you are an administrator of a company and your position is unpaid according to the bylaws, you cannot charge for these functions, even if the partners agree, and if the company enters into contest, you may have to return the money received.

If you find yourself in a similar situation as described, our professionals can provide you with the necessary assistance and take all the actions that may be relevant