Judgment;Summary — ECLI:EU:C:2025:262
Date: 2025-04-10
Language of the case: Spanish
Court formation: Sixth Chamber
Subject matter: Right of establishment;Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: Spain

Summary C-723/23 – 1 
Case C-723/23 [Amilla] i 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
28 November 2023 
Referring court: 
Juzgado de lo Mercantil n.º 3 de Gijón (Spain) 
Date of the decision to refer: 
13 October 2023 
Applicant: 
Agencia Estatal de la Administración Tributaria 
Defendants: 
VT 
UP 
  
Subject matter of the main proceedings 
Insolvency proceedings – Application by the insolvent debtor (a defendant in this 
case) to be granted a discharge of an unsatisfied liability – Objection of one of the 
creditors (the applicant in this case) to such a discharge being granted – Basis of 
the objection: declaration of the debtor as a person affected by the determination 
of culpability in respect of the insolvency of a third party 
Subject matter and legal basis of the request 
Request for a preliminary ruling on validity/interpretation – Article 267 TFEU – 
Compatibility of national provisions with Directive (EU) 2019/1023 – Recital 79 
and Articles 20 and 23 of Directive 2019/1023 – Concept and scope of dishonest 
 
i The name of the present case is a fictitious name. It does not correspond to the real name of any party to the proceedings. 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-723/23 
 
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action or bad faith on the part of the debtor – Principle of full discharge of debt – 
Second-chance procedure: subjective exceptions versus objective exceptions 
Question referred for a preliminary ruling 
(1) Must Article 23(1) of Directive (EU) 2019/1023 of the European Parliament 
and of the Council of 20 June 2019 on preventive restructuring frameworks, on 
discharge of debt and disqualifications, and on measures to increase the efficiency 
of procedures concerning restructuring, insolvency and discharge of debt, and 
amending Directive (EU) 2017/1132 of the European Parliament and of the 
Council relating to certain aspects of company law (Directive on restructuring and 
insolvency) be interpreted as precluding a national provision such as 
Article 487(1)(4) of the Recast Text of the Insolvency Law, following the wording 
given to it by Law 16/2022 of 5 September, where it includes, in the concept of 
dishonest action or bad faith on the part of the debtor actions relating to creditors 
of third parties, other than those which make up the list of creditors for his or her 
own personal insolvency? 
(2) Is Article 487(1)(4) of the Recast Text of the Insolvency Law, following the 
wording given to it by Law 16/2022 of 5 September, consistent with Article 20 of 
Directive (EU) 2019/1023 of the European Parliament and of the Council of 
20 June 2019 on preventive restructuring frameworks, on discharge of debt and 
disqualifications, and on measures to increase the efficiency of procedures 
concerning restructuring, insolvency and discharge of debt, and amending 
Directive (EU) 2017/1132 of the European Parliament and of the Council relating 
to certain aspects of company law (Directive on restructuring and insolvency), 
given that it provides for an exception within the second-chance procedure which 
prevents it culminating in a full discharge of debts? 
(3) Is Article 487(1)(4) of the Recast Text of the Insolvency Law, following the 
wording given to it by Law 16/2022 of 5 September, consistent with Article 20(2) 
and recital 79 of Directive (EU) 2019/1023 of the European Parliament and of the 
Council of 20 June 2019 on preventive restructuring frameworks, on discharge of 
debt and disqualifications, and on measures to increase the efficiency of 
procedures concerning restructuring, insolvency and discharge of debt, and 
amending Directive (EU) 2017/1132 of the European Parliament and of the 
Council relating to certain aspects of company law (Directive on restructuring and 
insolvency), given that the national provision does not provide for the debtor’s 
individual situation, setting out an exception which is objective in nature, without 
any possibility of the Spanish courts being able to assess the subjective 
circumstances of a debtor accessing the second-chance procedure? 
Provisions of European Union law relied on 
Recital 79 and Articles 20 and 23 of Directive (EU) 2019/1023 of the European 
Parliament and of the Council of 20 June 2019 on preventive restructuring 
AMILLA 
 
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frameworks, on discharge of debt and disqualifications, and on measures to 
increase the efficiency of procedures concerning restructuring, insolvency and 
discharge of debt, and amending Directive (EU) 2017/1132 (Directive on 
restructuring and insolvency) 
Provisions of national law relied on 
Real Decreto Legislativo 1/2020, de 5 de mayo, por el que se aprueba el texto 
refundido de la Ley Concursal, en su versión modificada por la Ley 16/2022, de 5 
de septiembre, de reforma del texto refundido de la Ley Concursal, para la 
transposición de la Directiva (UE) 2019/1023, de 20 de junio de 2019 (Royal 
Legislative Decree 1/2020 of 5 May, approving the recast text of the Insolvency 
Law, as amended by Law 16/2022 of 5 September, reforming the recast text of the 
Insolvency Law for the purposes of the transposition of Directive (EU) 2019/1023 
of 20 June 2019; ‘the TRLC’) 
In particular: 
Article 486 of the TRLC 
Article 487(1)(4) of the TRLC 
Succinct presentation of the facts and procedure in the main proceedings 
1 In the present proceedings, the Agencia Estatal de la Administración Tributaria 
(National Tax Administration Agency, Spain: ‘the AEAT’), in its capacity as 
creditor, objects, by means of an ancillary claim brought in the insolvency 
proceedings concerning the debtor VT, to the application for a discharge of the 
unsatisfied liability made by that debtor, who is a natural person. The AEAT bases 
its objection on the fact that the situation provided for in Article 487(1)(4) of the 
TRLC, following the wording given to it by Law 16/2022 of 5 September, applies 
to VT. According to Article 487(1)(4) of the TRLC, a debtor who is a natural 
person will not be able to obtain a discharge of the unsatisfied liability where, in 
the ten years prior to the application for a discharge, he or she has been declared a 
person affected by the decision determining the culpability or otherwise of the 
insolvency of a third party and where that insolvency was in turn determined to be 
culpable. However, where the debtor, on the date of submitting the application for 
a discharge, has fulfilled in full his or her responsibilities [in relation to the earlier 
insolvency], he or she may have recourse to a discharge of the unsatisfied liability. 
2 The facts necessary for consideration of the legal dispute in this case may be 
summarised as follows: 
3 With regard to insolvency proceedings numbers [1] and [2], relating, respectively, 
to the commercial companies BLANCO Y NARANJA, S. L., and MALVA Y 
NARANJA, S. L., in judgments of the Juzgado de lo Mercantil número 3 de 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-723/23 
 
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Oviedo (Oviedo Commercial Court No 3, Spain), sitting in Gijón – given on 
23 November 2020 and 20 April 2021, respectively – the insolvencies of both 
companies were determined to be CULPABLE. 
4 VT and his wife UP were directors of those two companies with authority to 
represent the companies acting alone. For that reason, in both judgments, as well 
as determining the insolvencies of those companies to be CULPABLE, VT and 
UP were identified as persons affected by the determination of culpability in 
respect of those insolvencies. And, as a consequence of the foregoing, both 
judgments imposed a number of punitive measures on VT and UP: (i) 
disqualification from administering third-party assets and from representing or 
administering any [legal] person, for a variable period of time; (ii) loss of any 
entitlement they had as insolvency creditors or to the insolvency estate; (iii) an 
order, with joint and several liability on the part of VT and UP, to make up the 
asset shortfall – EUR 280 468.64 in the case of the company BLANCO Y 
NARANJA, S. L., and EUR 62 035.91 in the case of the company MALVA Y 
NARANJA, S. L.; and (iv) payment of the procedural costs occasioned. 
5 Both judgments at first instance were the subject of appeals to the Audiencia 
Provincial de Asturias (Provincial Court, Asturias, Spain). Those appeals were 
decided by means of judgments given by Section One of the Provincial Court, on 
8 March 2022 and 1 March 2022, respectively. In both judgments, (i) the 
determination of CULPABILITY in respect of the insolvencies of both companies 
is upheld; (ii) VT and UP continue to be identified as persons affected by the 
determination of culpability in respect of those insolvencies; and (iii) the 
disqualification of VT and UP is upheld, as well as its duration, the loss of 
entitlements and the orders, with joint and several liability, requiring those 
affected individuals to make up the asset shortfall (the first of the two judgments 
reduces the amount of the shortfall to be made up from EUR 280 468.64 to 
EUR 169 085.24; the second judgment, however, leaves the amount to be paid 
unchanged). In both judgments, the appellants are ordered to pay the costs 
occasioned at that second instance. 
6 For his part, VT, having difficulty in paying his debts and in his capacity as an 
entrepreneur, attempted to reach an out-of-court payment agreement with his own 
creditors, to that end submitting the relevant application to the Gijón Chamber of 
Commerce. 
7 That out-of-court payment agreement could not be reached and, in view of that 
fact, VT’s insolvency mediator submitted an application to Oviedo Commercial 
Court No 3, sitting in Gijón, for VT to be declared insolvent. 
8 On 21 January 2020, by means of an order of that court, the consequent personal 
insolvency of VT was declared. 
9 By an order of the same court of 8 February 2021, VT’s insolvency was 
determined to be INADVERTENT. 
AMILLA 
 
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10 VT applied for a discharge of the unsatisfied liability by means of a document 
registered at that court on 2 February 2023. 
11 The representative of the AEAT expressly objected to that application for a 
discharge – pursuant to Article 487(1)(4) of the TRLC and on the grounds set out 
in that provision. The insolvency administrators, however, expressed their 
approval of the insolvent’s application. As a result of the AEAT’s objection, the 
relevant ancillary insolvency proceedings were initiated. 
The essential arguments of the parties in the main proceedings 
12 The AEAT maintains that the insolvent debtor (VT) is affected by the exception 
provided for in Article 487(1)(4) of the TRLC, following the reform introduced by 
Law 16/2022 of 5 September, for the purposes of the transposition of Directive 
(EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019, 
having been declared a person affected by a decision determining the insolvency 
of a third party to be culpable, without that debtor having fulfilled in full his 
responsibilities. 
13 For his part, the insolvent debtor, VT, maintains that he is a good-faith debtor 
with regard to ‘his own creditors’, having been declared a person affected by the 
determination relating to the insolvency of the legal persons of which he was a 
director with authority to represent the companies acting alone, on account of his 
status as a surety for those companies. He further maintains that the bad faith of a 
director in respect of the creditors of a third party does not limit the debtor’s 
access to the benefit of a discharge of his or her liability in respect of his or her 
own creditors. He also asserts that the national legislation has established a bar to 
discharge based on a situation of objective liability which is not subject to 
moderation, contrary to the system set out in Directive 2019/1023 of a bar based 
on subjective liability, that is, a system which takes into account the subjective 
circumstances of the debtor, making it possible to determine whether a debtor was 
dishonest. That is not possible with the current national provision in the form in 
which it has been transposed. The insolvent debtor also asserts that the current 
Spanish provision is more restrictive that the previous version contained in the 
TRLC. The previous version of Article 487 did not contain the limitation now 
provided for in paragraph 1, point 4. Consequently, the new provision has become 
a punitive provision, which, in his opinion, makes it inapplicable to debtors who 
applied for a declaration of insolvency prior to its entry into force, since, he 
maintains, it is contrary to the Spanish Constitution to apply, retroactively, a 
punitive provision to factual situations which existed prior to its entry into force. 
14 The insolvency administrators, for their part, maintain that there is no basis for 
believing that the debtor has acted dishonestly or in bad faith, according to the 
national legislation, with regard to the creditors at the time of going into debt, 
during the insolvency proceedings or during payment of the debt. All of the debt 
capable of being discharged is debt originating from the two companies of which 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-723/23 
 
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the debtor and his wife, UP, were shareholders, directors with authority to 
represent the companies acting alone and sureties, and, therefore, they could 
hardly have been dishonest at the time of incurring the debt, nor during the 
insolvency proceedings and payment of the debt. Because VT applied for his own 
[personal] insolvency, they have already been deprived of all of their assets, which 
had to be liquidated in order to pay loans, and, therefore, the subjective 
circumstances for accessing a discharge apply to the debtor. Moreover, the 
insolvency administrators maintain that paragraph 3, point 6, of the First 
Transitional Provision of Law 16/2022, which establishes the application of that 
law to applications for a discharge of debt submitted after its entry into force 
(which took place on 26 September 2022), is unconstitutional, since it violates 
Article 9(3) of the Spanish Constitution, containing the principle of non-
retroactivity with regard to punitive provisions that are unfavourable to, or 
restrictive of, individual rights and the principle of legal certainty. 
15 With regard to the appropriateness of requesting a preliminary ruling from the 
Court of Justice on account of the possible incompatibility of Article 487(1)(4) of 
the TRLC with Directive (EU) 2019/1023 (a matter on which the referring court 
questioned the parties), the AEAT is opposed, maintaining, in essence that there is 
no violation of Directive 2019/1023, as the list included in Article 23(4) of that 
directive is not exhaustive and because that directive is not applicable to natural 
persons who are not entrepreneurs. The insolvent debtor maintains that the 
national legislation does violate Article 20, Article 23(1) and recital 79 of that 
directive. For their part, the insolvency administrators have expressed their 
agreement with the preliminary ruling being requested, given that the provision at 
issue – Article 487(1)(4) of the TRLC, following the reform introduced by Law 
16/2022 of 5 September – is in direct conflict with the content of Article 23 of 
Directive 2019/1023. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
16 Article 23 of Directive 2019/1023 allows Member States to maintain or introduce 
provisions denying or restricting access to the discharge of debt where the 
entrepreneur acted dishonestly or in bad faith towards ‘creditors’. In the present 
case, the exceptions provided for in the national legislation, among them that 
stated in Article 487(1)(4) of the TRLC, set out the situations in which the 
national legislature considers the debtor to have acted dishonestly or in bad faith, 
raising the question of the validity of that provision in accordance with the EU 
directive, especially where the personal insolvency of the debtor has been 
determined to be INADVERTENT, since the EU provision appears to refer to the 
debtor’s dishonest character or bad faith in relation to his or her creditors, not the 
creditors of a third party, even if the debtor has had to be accountable to those 
creditors, on account of his or her status as company director with authority to 
represent the company acting alone and as surety for the company. 
AMILLA 
 
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17 Consequently, the referring court is uncertain whether the term ‘creditors’ 
appearing in Article 23(1) of Directive 2019/1023 refers exclusively to the 
creditors of the debtor involved in proceedings for a discharge of an unsatisfied 
liability or whether the creditors of a third party are also included in the EU 
legislation’s concept of ‘creditors’ for the purposes of a discharge of the liability 
of the debtor as a natural person. 
18 In the case under examination, the determination of culpability in respect of the 
insolvencies of two third parties, the companies BLANCO Y NARANJA, S. L., 
and MALVA Y NARANJA, S. L. (of which the insolvent, along with his wife, 
UP, was a director with authority to represent the company acting alone), raises 
the question of whether the creditors referred to in Article 23(1) of Directive 
2019/1023 are, exclusively, the creditors of the debtor in his personal insolvency 
or whether the creditors of a third party must also be included in that concept. 
19 Accordingly, the first question which should be put to the Court of Justice is 
whether it is possible to extend to the creditors of a third party the limitation on, or 
exception to, access to a discharge of a debtor’s unsatisfied liability in respect of 
his or her own creditors and whether that is compatible with the generic concept 
of ‘creditors’ referred to in Article 23(1) of Directive 2019/1023. To put it another 
way: does the scope of the concept of ‘acted dishonestly or in bad faith’ appearing 
in Article 23 of that directive include the debtor’s actions in respect of creditors 
other than those which make up the list of creditors for his own personal 
insolvency? 
20 This question is, therefore, referred for a preliminary ruling so that the Court of 
Justice of the European Union can provide a reasoned response, interpreting the 
abovementioned provision of Directive 2019/1023, analysing whether the national 
legislation, represented by Article 487(1)(4) of the TRLC, is in accordance with 
the interpretation given by the Court of Justice to the concept of creditors in 
Article 23(1) of that directive and, consequently, whether that national provision 
is in accordance with or contrary to the Insolvency Directive. 
21 Furthermore, full access to a procedure which could culminate in a full discharge 
of the debts is not possible in the case under consideration, as the application of 
the exception contained in Article 487(1)(4) of the TRLC prevents a debtor who is 
a natural person from accessing the procedure for a full discharge enshrined in 
Article 20 of Directive 2019/1023, as it requires him or her to be accountable to 
the creditors of a third party, thereby limiting or preventing the possibility of 
obtaining a full discharge of his or her liability in relation to his or her own 
creditors. 
22 Is Article 487(1)(4) of the TRLC therefore compatible with Article 20 of Directive 
2019/1023? Is the exception provided for in the national legislation consistent 
with the provisions of EU law with regard to a procedure which could culminate 
in a full discharge of debts? 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-723/23 
 
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23 Moreover, the rules for accessing a full discharge set out in the EU provision 
require such access to be based on the subjective circumstances of the debtor, that 
is, on his or her individual situation, with Article 20(2) of Directive 2019/1023 
stating in that regard, by way of judicial or administrative criteria for the 
subjective assessment of the debtor’s circumstances, that the repayment obligation 
should be proportionate to the seizable or disposable income and assets during the 
discharge period. In the case under consideration, the national provision does not 
take into account the debtor’s individual situation, but rather the exception 
provided for in Article 487(1)(4) of the TRLC is objective, without any possibility 
of the Spanish courts being able to assess the subjective circumstances of a debtor 
accessing the second-chance procedure, as provided for in recital 79 of that 
directive. 
24 So, according to the EU legislation, could the debtor be regarded as having acted 
dishonestly or in bad faith on account of being a person affected by the 
determination of culpability in respect of the insolvency of a third party, where the 
national legislation does not include any criteria to allow the courts to assess those 
actions of the debtor subjectively and where the debtor’s personal insolvency has 
been determined to be inadvertent? 
25 Bearing in mind that the courts and tribunals of the Member States may refer a 
question to the Court of Justice on the interpretation or validity of EU law where 
they consider that a decision of the Court on the question is necessary to enable 
them to give judgment, pursuant to the second paragraph of Article 267 TFEU, 
and also bearing in mind that a request for a preliminary ruling may prove 
particularly useful when a question of interpretation is raised before the national 
court or tribunal that is new and of general interest for the uniform application of 
EU law, or where the existing case-law does not appear to provide the necessary 
guidance in a new legal context or set of facts, the referring court submits this 
request for a preliminary ruling to the Court of Justice, in order to be able to 
resolve the dispute arising in the present case.