June 20, 2021

Bankruptcy proceedings soar 86.5% in the first quarter despite the moratorium


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The scourge of suspension of payments of Spanish companies begins to emerge in 2021 after more than a year of pandemic and restrictions on economic activity. Despite the moratorium approved by the Government and extended until the end of this year, the number of debtors in bankruptcy shot up 86.5% annually in the first quarter of 2021 and they reached the figure of 2,799, according to data from the College of Registrars.

As a novelty compared to previous reports, the figure now includes both companies and individuals who have filed for bankruptcy for not being able to meet the pending payments and suffer serious financial problems. In breakdown, a total of 1,260 are companies legal persons, 530 are natural persons with business activity and 1,009 are natural persons without business activity, which represents an increase of 45%, 18.9% and 36.1% respectively, of the total debtors.

Restrictions and difficulties for mobility due to the effect of the pandemic did not hit all areas of activity the same. The sectors hardest hit by the coronavirus were those related to street activity, but also to leisure tourism. Therefore, the greatest impact was on trade, which accounted for 18.2% of the companies declared bankrupt; followed by hospitality, with 17.9%.

On the other hand, the companies that suffered the most were those with the smallest staff and size, that is to say, SMEs and the self-employed, who are the majority in our country. Depending on the number of employees, 41% of the total companies declared bankrupt from January to March 2021 had less than six workers on their payroll. Furthermore, 31.4% did not have any employee on the staff. By seniority, 26.4% of the total number of bankrupt companies had an antiquity of 20 or more years. For their part, 15.3% are four or less years old.

By type of contest, the Registrars’ report shows that the suspensions were voluntary in a total of 1,522 cases (6.4% more than in the first quarter of 2020), and 19 necessary (73.2% In addition, for the first time the express tenders are categorized – simultaneous opening and closing of the procedure -, which reached a total of 853. If we look at the type of procedure, the ordinary tenders increased by 9%, while the abbreviated tenders increased by 9%. they did by 31.1%.

Zombie companies

Although they began to rebound in December of last year, the number of bankruptcy filings was very low despite the scenario of restrictions and economic crisis derived from the management of the pandemic. Due to the bankruptcy moratorium approved by the Government and extended until the end of 2021, a large number of contests in the making had been hidden by companies considered as zombies and are beginning to explode now, a situation that could drag more companies that will stay turn without charging from their bankrupt clients.

Numerous experts and organizations such as REFOR had already warned that the outbreak of insolvencies would affect Spain with special emptiness because it counteracts Spain for having a large number of SMEs and also for the dependence of the Spanish business fabric on activities related to leisure such as tourism and the hospitality industry.

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