His letter of sponsorship is it weak or strong?
If they ask for a letter of sponsorship, Think twice.
The sponsorship letters they are a legal tool imported common law in which they are commonly referred to as "comfort letters”.
They are often used in cases where a subsidiary needs to obtain funding and support for it is requested by the parent group. In this manner, the creditor gets some assurance that the debtor is reliable and that the sponsor agrees to keep for a while and conditions its stake in the subsidiary.
Nos encontramos ante una figura atípica. Depending on the wording given to the letter of sponsorship, You can qualify as a simple declaración de intenciones con poco calado jurídico, or a garantía solidaria with all its implications. And in between, con todo un abanico de posibles planteamientos intermedios.
This variety of possibilities, coupled with the effects of the crisis, It has generated more than a few legal disputes, following which, the Supreme Court has been building its doctrine. So things, el Alto Tribunal distingue entre cartas de patrocinio “fuertes” and “débiles”.
Las cartas de patrocinio fuertes constituyen una garantía completa cuyo cumplimiento puede ser exigido ante los tribunales.
For his part, las cartas de patrocinio débiles se consideran simples recomendaciones o declaraciones de confianza, merely declaratory, and whose failure hardly allow a claim with guaranteed success.
This vagueness or lack of legal certainty, it can be used a the less "questionable" way by the requesting, into believing that the sponsor is not committing a guarantee and then demanding compliance to court.
The Supreme Court has ruled on one such case in its judgment of 27 June 2016. The financial institution, He said the "sponsor" with the sponsorship letter was not signed any endorsement, and subsequently, compliance demanded in court. And finally, the Chamber considers that it is a "strong letter of sponsorship" and confirms the condemnation companies "sponsoring".
Banesto S.A. He granted a loan to the commercial Ecological Integral Maintenance S.L.. (hereinafter MEI) by 1.500.000 euros. Sounding the Extremadura companies S.L.. (EdS) and Company Generators and Generators S.L.. (CGyGE) otorgaron sendas sponsorship letters so that it could approve the loan. Both companies controlled and managed the borrowing entity, when she and shareholders belonging to the same group. However, MEI infringed the obligation to repay the loan and Banesto solicitó el pago a las demandadas por 1.532.247 euros.
Spanish Credit Bank filed a lawsuit against Extremadura Sounding S.L.. (EdS) and Company Generators and Generators S.L.. (CGyGE) solicitando la declaración del incumplimiento de la garantía prestada en las respectivas cartas de patrocinio, issued by the defendants the 28 April 2009, Ecological Maintenance for Integral S.L.. and condena solidaria al pago de 1.532.247 euros con sus intereses de demora. Alternatively asked to condemn the defendants to transfer funds or take any other action that produces the same effect so that Ecological Integral Maintenance S.L.. I could cancel its debt with the Spanish Credit Bank.
The defendants argued that the sponsorship letters contained only a declaration of intent, without any commitment obligational. Solamente ostentaban un porcentaje en el accionariado de MEI y por tanto, in the worst case, They should respond according to their percentage interest in the capital of the debtor.
Sponsorship letters indicated literally:
"We are committed irrevocably to assure the maintenance company Integral Ecological S.L.. our full financial assistance under the participation we have in the same, taking the necessary steps to ensure that it meets its obligations promptly with your body, either by transferring funds necessary for the same, or performing any other actions that produce the same effect ".
The Court of First Instance number 56 Madrid gave judgment on 11 June 2012 estimating demand and condemning EdS and CGyGE to pay 1.532.247 euros con intereses y costas. Consideró que nos encontrábamos ante “cartas de patrocinio fuertes”, in which clearly it assumed a payment guarantee jointly and severally. Both letters contain the following elements:
1.- A statement of knowledge of the study of the credit operation.
2.- A recognition of the social participation in MEI.
3.- A recognition hold effective control and management of MEI.
4.- A commitment to keep the shares while not cancel the loan MEI.
5.- An irrevocable commitment of financial assistance to fulfill its obligations MEI.
For the Court, the letters are clear and diaphanous. And the percentage of direct participation in MEI does not determine a partial liability for the debt but there is a compromiso personal de garantía. For the sake, between the two defendants, indirectly, MEI control most purposes Articles 42 CdC y 87 LSA.
CGyGE interpuso recurso y la Sección 19 of the Provincial Court of Madrid issued a decision dated 30 September 2015 dismissing it. Employment in sponsorship letters expression “mediante la transferencia de fondos necesaria” no ofrece duda de que la garantía es total y plena.
EdS and CGyGE filed extraordinary appeals for procedural infringement and appeals to the Supreme Court, that rejects.
Focusing on the appeals, motifs were:
1.- Violation of estoppel and Article 7.1 the C.Civil.: Banesto va contra sus propios actos pues les aseguró que las cartas de patrocinio no supondrían un aval. La Sala desestima el motivo. The guarantee is different from the letter of sponsorship, inter alia regarding accounting obligations. Pero no implica que las demandadas no deban responder.
2.- Violation of the Doctrine of the Supreme Court about the nature and extent of sponsorship letters, citing the STS de 30 June 2005. For recurring, we would be "weak letters", which lack the will to be bound, they were not signed until the bank told them it was not a guarantee and that they should only respond in the worst according to their percentage shares in MEI. The Chamber refers to its doctrine on sponsorship letters, citing its judgment of 28 July 2015.
Las cartas de patrocinio en sentido propio son “fuertes” namely, They obligational have significance as it is a unilateral declaration of will, which it is a real binding relationship:
"The sponsor assumes an obligation of result with the creditor, or creditor future, by the success of the operations or financial instruments designed; so that guarantees its equity Indemnity about. "
Obligational effectiveness requires compliance with two conditions:
- The letter must collect sponsorship clearly and unequivocally the commitment of the sponsor obligational.
- The obligational commitment of the sponsor must be accepted by the creditor.
The Chamber considers that both conditions are met, that la voluntad real o efectiva querida por las recurrentes, era garantizar al acreedor el pago por parte de MEI, text under the sponsorship letters.
Also, the sponsors had a clear dominant position with respect to the debtor.
Last, the obligational commitment of the sponsoring companies should be considered solidarity on the basis of systematic interpretation of sponsorship letters (inter SSTS of 18 November 2013 and 12 November 2014).
Ultimately, se desestiman los recursos y se confirma la sentencia de la primera instancia que obliga a las demandadas al pago de la deuda de MEI como consecuencia de las sponsorship letters emitidas.
If they ask for a letter of sponsorship, required to indicate whether this is "strong" or "weak" and that accurately delimits the extent of its commitments and the existence of guarantees. The uncertainty can be very expensive in the long run.