A heavy slab that they have been dragging for years. For many companies, that is the losses generated during the pandemic. Some opted for dissolution, but others clung to a legal lifeline created in the midst of the crisis to help them continue raising the blinds every day. This is the accounting moratorium or corporate moratorium, an instrument that has allowed them to avoid this cause of dissolution contemplated by law, despite the red numbers that appear in the accounting books of the worst years of covid, 2020 and 2021. In this way, companies in the hospitality, commerce, tourism, construction or automotive sectors have been able to function as if these deteriorations did not exist and have also had extra time to try to recover from the imbalances in their balance sheets. But this accounting “fiction,” as experts describe it, ends on December 31, 2024. To avoid an economic and business catastrophe due to coronavirus restrictions, in 2020 the Government implemented two high-impact measures: a bankruptcy moratorium , which ended in June 2022, and a corporate or accounting moratorium. Royal Decree-Law 20/2022, of December 27, extended the effects of the latter until the end of 2024 in order to support companies that, before the crisis and under normal conditions, had the capacity to assume their obligations. and keep working. The goal? That the economic stoppage did not truncate their viability. “The moratorium has allowed companies in economic difficulties to improve their financial stability in a context of recovery and facilitate the business restructuring process without the pressure of having to show viability or solvency in the short term. ”explains Victoria Vilar, mergers and acquisitions partner at Zadal. In addition, it has given them more room to plan for the long term, adapt to new market conditions and, in the most optimistic scenarios, undertake innovations and improvements. Thanks to it, companies have been able to ignore the deteriorations recorded in the toughest years to take advantage of the option of avoiding the legal cause of dissolution if their net worth remained below half of their share capital. And the fact is that, if a company reaches this point, the Capital Companies Law obliges the directors to call a meeting in the following two months to decide whether to put an end to the company's activity or if they adopt measures to remove the business floats. It is not that losses do not exist, because they are there and appear on the balance sheet, but we act as if they did not exist, clarifies Juan Díaz Hidalgo, commercial partner at Eversheds Sutherland. The lawyer says that in these years many companies that were not able to get back on their feet chose not to prolong the agony and closed down. And, in any case, he warns that “companies have had to continue doing their accounting. If in 2022 and 2023 the situation continued to deteriorate, with those numbers they would have already had to go to the cause of dissolution because not all companies accepted the moratorium, it was not mandatory.
An oxygen cylinder
Some have managed to recover to previous covid levels in recent years. “In some cases, the passage of time has shown that these were merely temporary losses,” explains Victoria Vilar, who points out that, in recent years, even in the mergers and acquisitions market, it has been common not to take the results into account. of 2020 and 2021 in the valuation of the company that is the subject of an operation. But other companies are on the limit. “Those that have had a negative performance after the fact are very likely to have gone to competition. And the companies that could be on the tightrope are very specific cases,” warns Manuel García-Villarrubia, bankruptcy partner at Uría. Specialists believe that there should be no big surprises and that, at this point, with the accounting balances on the table, the panorama should be more or less clear for the administrators. The moratorium touches on something very sensitive: the responsibility of the administrators. In the red, “if they do not call the meeting in two months to make decisions, there would be joint liability of the administrators and they will have to respond with their personal assets. “This creates an incentive for them to be diligent when adopting measures,” says Juan Díaz Hidalgo. Precisely the main benefit of both moratoriums has been to put this responsibility into hibernation. There is a coincidence that, in the two years prior to 2024, there has been a kind of natural purge of unviable businesses, which have been dissolved, and also of companies in difficulty facing their debts, for example, cases of companies that were not in equity imbalance, but that were in bankruptcy. The impact of the end of the moratorium will hardly be noticed in large companies and multinationals, but SMEs They may have it more difficult. “In the end, the real economy is what works. This is a fiction that may have helped, but reality prevails. Asset imbalance is one thing, but most companies die due to lack of liquidity,” concludes Juan Díaz Hidalgo. Now is the time to review the accounts to know if the situation is critical. “The administrator must know now, with the available data and those verified in accounting, if the float is going to turn into a pumpkin and determine the measures that can be adopted,” explains Manuel García-Villarrubia, who emphasizes that company managers must be diligent if they see that the company is not improving. Time is running out.
decision making
The sooner decisions are made to revive the company, the better. The calendar is pressing. “October is a good time to have some margin and decide what to do: contribution of funds from partners, search for an investor to bring capital… Finding financing takes time,” warns Manuel García-Villarrubia, partner at Uría. “They have to know the measures they can adopt to save themselves: an increase in capital, a reduction to adjust the net worth, or close the partner's participatory loans that count as net worth,” proposes Juan Díaz Hidalgo, partner at Eversheds Sutherland.