Vol 16 (2019) - Issue 3

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Treatment of Shareholders’ Right of Separation in Insolvency Proceedings

Synopsis

The judgment of Audiencia Provincial de A Coruña (Provincial Court of A Coruña, the 'Provincial Court') in its ruling number No. 12/2018 of 15 January 2018 (the 'January 2018 Judgment') resolved some of the most relevant issues related to the exercise of the right of separation by a company’s shareholder pursuant to Article 348bis of the Spanish Capital Companies Act ('LSC'), including, among others, after what time a shareholder loses its status for the purpose of Article 92.5 of the Spanish Insolvency Act ('LC') (see below) and the status of the shareholder’s claim arising from the exercise of the right of separation in the waterfall upon insolvency.