Eduardo Güells | Partner at Allyon ETL
For more than three decades, Eduardo Güells has advised companies and family-owned groups on some of the most sensitive issues they have faced: insolvency proceedings, corporate disputes, restructuring, negotiations with creditors and periods of severe crisis. A founding partner of Allyon ETL, Güells has witnessed first-hand the transformation of the Spanish business landscape and the growing complexity of the insolvency and corporate legal framework.
In this conversation, he reflects on the role of the lawyer in times of crisis, the evolution of insolvency law in Spain, the most common mistakes made by business owners, and the importance of taking proactive measures when a company is facing financial strain or internal conflict.
The Calling
Interviewer (I).- Eduardo, after more than thirty years specialising in insolvency and company law, and as a founding partner of the firm, what continues to motivate you every day as you face new business challenges?
Eduardo Güells (EG).- What continues to motivate me is the opportunity to help companies through their most difficult times. Insolvency law is not, as is sometimes thought, purely a liquidation-focused discipline, but rather a tool for saving businesses, restructuring debts and enabling an organisation to continue operating.
When an entrepreneur comes to us with a cash flow crisis, a dispute between partners or a critical situation with creditors, they often bring with them a heavy emotional burden, many doubts and sometimes a sense of failure. Our job is to turn that scenario into a plan.
We recently assisted an industrial company that was on the brink of ceasing operations. Following a restructuring and the appropriate application of pre-insolvency measures, it is still operating today, has saved several jobs and has regained stability. It is at times like these that you feel the true value of this profession.
The Evolution
(I).- You have witnessed the transformation of insolvency law from the old Insolvency Act to the current legislation, characterised by preventive restructuring. If you could give just one piece of advice to the Eduardo who was starting his career, what would it be?
(EG).- I would tell him to listen more to the business owner and to understand that behind every balance sheet there are people, difficult decisions and highly complex contexts. At the start, we tend to focus on legal technicalities — which are, of course, essential — but over the years you realise that the key lies in knowing how to interpret the company’s economic reality.
I would also tell him to anticipate. Not to wait for insolvency proceedings as a last resort. Today, the law offers very powerful preventive tools: restructuring plans, pre-insolvency agreements, early warning mechanisms…
The true value of an insolvency lawyer lies in knowing how to act before the situation becomes irreversible.
The Present
(I).- Insolvency law is often perceived as a complex field fraught with uncertainty. How can a business owner view it as an opportunity rather than a failure?
(EG).- Insolvency is simply another tool. Just as a company uses bank financing or undertakes corporate restructuring, insolvency or pre-insolvency proceedings should be seen as management mechanisms.
When managed in good time, these procedures allow for the renegotiation of debt with greater legal force, the preservation of business operations, the protection of directors, the avoidance of increased liability, and the buying of time to restructure the company.
The problem arises when they are initiated too late. The modern entrepreneur must incorporate crisis management as a natural part of their strategy. Companies that plan ahead have a much higher probability of succeeding.
The Family Business
(I).- In a family business, corporate disputes and internal tensions can have a huge impact. What are the most common mistakes you see when it comes to managing them?
(EG).- The main mistake is failing to properly regulate relationships between partners. Many family groups are set up with very basic articles of association and without partnership agreements that anticipate scenarios involving deadlock, succession or sale.
Another common mistake is mixing the emotional sphere with the business sphere. In family businesses, a corporate conflict can escalate rapidly if it is not addressed professionally.
And a third: failing to plan. The lack of family protocols, clear governing bodies or rules for the transfer of shares often leads to situations that could be avoided with a minimum of legal organisation.
The Regulatory Landscape
(I).- Insolvency law is constantly evolving. Where do you think it is heading in the coming years?
(EG).- We are moving towards a more preventive, more technical and more professional system. The European trend is clear: to favour restructuring over liquidation.
Furthermore, we will see stricter requirements regarding directors’ liability, greater scrutiny of related-party transactions and greater involvement of financial creditors in restructuring processes.
The key for companies will be to have well-organised structures, transparent accounting and good corporate governance. When all of that fails, insolvency proceedings become vastly more complicated.
Restructuring
(I).- Many business owners view restructuring as a traumatic process. How can it become a competitive advantage?
(EG).- A well-designed restructuring can strengthen a company, not weaken it, as it allows for the reorganisation of debt, the professionalisation of management and, in
I have seen companies that, after undergoing restructuring, have emerged stronger, more efficient and with much more mature corporate structures.
Company Law and Corporate Governance
(I).- What role does a corporate advisor play in professionalisation or internal restructuring processes?
(EG).- It is a key role. Many companies begin to encounter problems when there is a lack of clarity regarding their governing bodies, decisions are not documented, or the corporate structure is disorganised.
Aligning the articles of association, shareholders’ agreements, family protocols and the actual running of the business is essential. Professionalisation is not just about hiring executives: it is about providing the company with clear rules that prevent future conflicts.
Internationalisation
(I).- When a company in crisis also operates outside Spain, how does this affect its restructuring or insolvency proceedings?
(EG).- Internationalisation adds layers of complexity: different jurisdictions, foreign creditors, international recognition mechanisms, European conventions…
That is why it is important to have a solid international network such as ETL’s, which allows us to coordinate legal actions in different countries and ensure consistent solutions across the entire business group.
Personal Perspective
(I).- After so many years advising on tense business situations, what has this profession taught you most about decision-making at critical moments?
(EG).- That in the most difficult moments, decisions must be clear, swift and well-founded. And that to make them, it is essential to combine legal insight, human sensitivity and business acumen.
An insolvency lawyer does not just manage debts: they manage expectations, fears, jobs and, at times, the future of companies that have been in the same family for generations.
When you manage to stabilise a company and give it a future, that is the greatest recognition this profession can offer.