Restructuring & Turnaround in Spain: Expert Insights

At Valtus Alliance, restructuring is always approached with the understanding that each country operates within its own legal and operational framework.

In this interview, Ronald de Zoete (Partner, Valpeo, Amsterdam) sits down with Juan Manuel Gil de Escobar (Managing Partner, Epunto, Madrid) to explore how restructuring works in Spain, with a focus on the concept of Probability of Insolvency and its impact on leadership, timing, and execution.

A Framework Built Around Early Detection

Ronald

What makes the restructuring framework in Spain unique?

Juan Manuel

Spain stands out because of its concept of Probability of Insolvency — a legal trigger that allows companies to act well before an actual default occurs.

Under the current Insolvency Act, this concept applies when a company is expected to default within a two-year horizon, unless corrective action is taken. It sits alongside two other stages: imminent insolvency and actual insolvency.

This creates a structured, forward-looking system. For boards and executives, it provides a window to negotiate and restructure without the immediate pressure of enforcement actions.

However, it also introduces responsibility.

Failing to act when indicators clearly point to future insolvency is not just a missed opportunity — it can be considered a breach of duty. In certain cases, this may expose directors to personal liability if the situation deteriorates further.

The Most Critical Mistake: Denial

Ronald

What do companies typically get wrong early in a crisis?

Juan Manuel

The most common and often fatal mistake is denial.

Management teams frequently attempt to solve the crisis using the same methods and assumptions that led to it. There is often an expectation that market conditions will improve quickly enough to correct the situation.

In reality, this rarely happens.

The concept of Probability of Insolvency should not be seen as an optional tool. It is a signal that requires immediate action. Recognising it early is essential not only for preserving the business, but also for protecting the board’s legal position.

Acting at this stage is difficult, because it requires confronting uncomfortable realities before the crisis becomes visible to others.

When External Leadership Becomes Necessary

Ronald

At what point should an external restructuring expert be brought in?

Juan Manuel

As soon as the probability of insolvency is identified.

In larger organisations, traditional consulting approaches are often not sufficient. Reports and recommendations alone do not create change at the pace required.

What is needed is an Interim Restructuring Manager acting as a Chief Restructuring Officer (CRO).

This role goes beyond advisory work. The CRO takes executive responsibility, with the authority to implement changes across operations, finance, and capital structure.

The Role of the Restructuring Plan

Ronald

What is your view on protective restructuring mechanisms?

Juan Manuel

The Restructuring Plan is the main protective framework in Spain.

It allows companies to reorganise debt and stabilise the situation under legal protection. However, if the right leadership is introduced early enough, it is often possible to avoid formal proceedings altogether.

The two-year horizon creates a valuable window. When used effectively, it allows restructuring to remain private and controlled.

An Execution-Focused Ecosystem

Ronald

How is restructuring supported operationally?

Juan Manuel

At EPUNTO Interim Management, we work with a network of experienced interim executives.

These professionals specialise in operations, finance, and human resources, often with CRO-level experience. Their focus is on execution — stabilising cash flow, restoring control, and leading negotiations.

They collaborate closely with leading law firms to ensure that operational and legal strategies move forward together.