Seminar on the procedural aspects arising from the sale of credit portfolios

The event analysed the pre-emptive buy-back of litigious credit provided for in the Civil Code, which allows the debtor to settle its debt for the price of the sale of the credit, both from a theoretical and practical standpoint. This faculty that the law confers on the debtor is generating a heavy case load for Spanish courts, not only because the debtors are turning to the courts for the pre-emptive buy-back of litigious credit, but also because of the problems that arise in the proceedings in which the assignee is trying to recover its claim against the debtor.

Javier Gutiérrez de Cabiedes, Head of Litigation Practice at CaixaBank, raised and resolved some current issues that are of interest to financial institutions. He addressed issues such as the procedural position usually taken by the assignor in proceedings initiated by the debtor; the potential impact of article 569-28 of the Civil Code of Catalonia; whether or not the securitisation of credits are susceptible to a pre-emptive buy-back of litigious credit action; and if, ultimately, this question has been referred for a preliminary ruling before the Court of Justice of the European Union.

Isabel González Pacanowska, Professor of Civil Law at the University of Murcia, then analysed the grounds and requirements for undertaking a pre-emptive buy-back of litigious credit provided for in the Civil Code. González Pacanowska reviewed the relevant case law, as well as the comparative law approach to this matter.

Luis López, Senior Associate in the Public law, Litigation and Arbitration area at Pérez-Llorca, discussed some of the procedural aspects which are bringing up the greatest practical challenges. In particular, he analysed whether the debtor can exercise the pre-emptive buy-back of litigious credit of global sales of credit portfolios; the different strategies that the assignor and the assignee may take within the framework of the procedure of preliminary proceedings prior to the exercise of pre-emptive buy-backs of litigious credit; and the possibility of requiring the debtor to allocate the price at which the pre-emptive buy-back of litigious credit takes place, under the threat of the filing of the procedure.

Finally, Guillermina Ester, the moderator of the event, drew the session to a close with an analysis of the approach of the Courts in terms of the various issues that arise regarding the communication to the debtor of the assignment of credit. She also addressed other common problems that arise in claims proceedings against the debtor, such as procedural succession within the framework of declarative and enforcement procedures, as well as the transfer of the auction to companies in the same group as the assignee.

The event, which was held at Pérez-Llorca’s Madrid headquarters and was watched via video conference from its Barcelona office, concluded with an enriching debate between the speakers and some of the attendees on the subject.