A first approach to creditor monitoring, the paradoxical missing lever of corporate governance in Spain

• Autores: Carlos Ara
• Localización: Estabilidad financiera, ISSN 1579-2498, Nº. 26, 2014, págs. 135-154
• Idioma: español
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• Resumen

  • The goal of this paper is to analyze empirically whether debt-holders actually develop a significant role in the corporate governance of distressed companies, as the economic theory would suggest.Although bankruptcy is still compulsory in Spain, going-concern companies draw on outof-court workouts primarily, setting aside the petition as the last resort to handle corporate insolvency. Bankruptcy remains thus as a venue for liquidating insolvent companies, which is at odds with the goals of the Spanish Bankruptcy Act. The empirical question that follows is whether this behavior draws on a rational decision grounded on the economics of transaction costs as a reaction against a governance problem. The data indicates that professional adjusting debt-holders rarely enforce creditor contractual remedies out-of-court, and that the structure of the Spanish bankruptcy proceeding disincentives shareholders filing a petition. Both findings cast doubt on the accuracy of Spanish insolvency law to provide stakeholders with effective tools of corporate governance to manage the agency problem that insolvency poses. The conclusion of the research is that our legal culture does not take account yet of the role of debt in corporate governance. This unsettling reality may put in jeopardy the ability to refinance going-concern businesses.