Supreme Court Explains Classification of Credit in Bankruptcy Proceedings for Future Credit Rights

The Supreme Court (TS) clarifies in two sentences, of June 15 and 22, How should the credit that has a pledge constituted without displacement on future credit rights be classified in a bankruptcy proceeding?. That is to say, the creditor guarantees the credit that he owes to the debtor with a payment that he will receive in the future and, therefore, without an asset to be transferred as pawn.

The two rulings, by the rapporteur and magistrate Juan María Díaz Fraile, determine that these credits can only be classified with special privilege if said pledge has been registered in a public registry (in Movable Property in the cases analyzed). Otherwise, he considers the magistrate that it would be a credit with general privilege.

Félix Salgado, a partner at the Prada Gayoso law firm, explains that for practical purposes it means that if the creditor is recognized with special privilege, what is taken from that asset will go directly to pay him. Otherwise, if the general privilege is recognized, what is taken from the property would enter the bankruptcy and the bankruptcy administration will use it to pay depending on who the law determines.

According to Salgado, sentences are relevant from the legal point of view because the bankruptcy administrator, when qualifying a credit that has constituted a pledge without displacement on future credit rights, You already know what the Supreme Court has decided . “Before there were doubts and after these two sentences they have been resolved by setting a criterion,” he says.

The High Court ruled for the first time in its ruling on the wording given to article 90.1.6º of the Bankruptcy Law of 2015, in whose amendment the requirement to register the pledge in a public registry was incorporated for the first time. Thus, it indicates that the norm establishes that the pledge “constituted on future credits” “will only enjoy a special privilege” when “before the declaration of bankruptcy” two requirements are present. The first, that future credits arise from perfected contracts or legal relationships established prior to the declaration; and two, that the pledge is constituted in a public document or, in the case of a pledge without displacement, has been registered competent public.

The magistrate states that it cannot be said that this norm that requires registration advertising for the pledge modality without displacement of future credits is an exception. “On the contrary, it is a manifestation of the general rule that requires for garments an advertising regimewhether possessory or registered”. Thus, it adds that article 90 of the Bankruptcy Law includes different cases of traditional real guarantees such as the real estate mortgage, movable property and pledge without transfer of possession, “in which the transfer of possession is replaced by publicity registration”.