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Reforms to employer succession in Spain

The Spanish Insolvency Act (hereinafter, “IA”) propose as one of its main objectives to maintain the continuity of the economic activity in companies involved in insolvency proceedings.

 During recent years, due to the regulation, it has been possible to save numerous jobs and business units through the sale of productive units within the context of insolvency proceedings. The reason behind this achievement was that this type of sale made it possible to keep business units economically viable by leaving behind insolvency liabilities, combined with subrogation of employment contracts as a necessity in order to ensure this continuity.

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