Specialized Defense in Punishable Insolvency and Frustration of Enforcement

At RAKH Abogados we are experts in Economic Criminal Law, offering a high-level technical defense against accusations of punishable insolvency and frustration of enforcement (historically known as alzamiento de bienes, or fraudulent removal of assets). In an environment where the line between unfortunate business management and criminal conduct is extremely thin, our proactive involvement is essential to protect the assets and the freedom of directors and companies.

1. Elements of the Offense and Its Forms

The Criminal Code (Articles 257 to 261 bis) punishes a debtor who, in a situation of crisis or insolvency, intentionally defrauds their creditors. In our practice we distinguish two main strands:

• Frustration of Enforcement (Art. 257 CP): This punishes the concealment, transfer, or encumbrance of assets in order to prevent the effectiveness of an attachment or an enforcement proceeding that has already begun or is imminent.

"El artículo 257.1.2 del Código Penal es aplicable al que dilate, dificulte o impida la eficacia de un embargo o de un procedimiento ejecutivo o de apremio, iniciado o de previsible iniciación, cuando se realice para perjudicar a los acreedores del sujeto actuante." (Article 257.1.2 of the Criminal Code applies to a person who delays, hinders, or prevents the effectiveness of an attachment, or of an enforcement or collection proceeding, that has begun or is foreseeably about to begin, when done to prejudice the acting party's creditors.)

Supreme Court, Criminal Chamber, STS 687/2022, of 22 February 2022 (ECLI:ES:TS:2022:687), Legal Ground 8.4 — a judgment that, in its operative part, expressly convicts the defendant of «an offense of frustration of enforcement under Article 257.1.2 of the Criminal Code».

• Punishable Insolvency in the strict sense (Art. 259 CP): This requires a situation of actual or imminent insolvency and protects the body of creditors as a whole against "bankruptcy" conduct such as the destruction of assets, double accounting, disproportionate expenses, or sales below production cost.

"La lesión del bien jurídico no se produce porque mediante dichos actos negociales se provoque de forma necesaria una situación de insolvencia sino porque se afecte de forma significativa la eficacia de los mecanismos institucionalizados con los que el ordenamiento jurídico tutela el crédito o el cumplimiento de obligaciones patrimoniales." (The injury to the protected legal interest does not arise because such transactions necessarily bring about a situation of insolvency, but because they significantly affect the effectiveness of the institutionalized mechanisms through which the legal system protects credit or the performance of pecuniary obligations.)

Supreme Court, Criminal Chamber, STS 2491/2026, of 4 June 2026 (ECLI:ES:TS:2026:2491), Legal Ground 4.1, reiterating the doctrine established in STS 758/2021, of 7 October.

2. Defense of the Director and Corporate Liability

The consequences of these offenses are serious and are not limited to prison sentences (which can reach up to 6 years in aggravated forms).

• Derivation of Liability: The director may be ordered to pay the shortfall of the insolvency proceeding out of their personal assets, which can amount to a financial "civil death."
• Liability of Legal Entities: Companies can also face multi-million-euro fines and dissolution if they do not have effective Criminal Compliance programs in place.

3. Defense Strategy

Our technical defense is based on dismantling the prosecution's case through four strategic lines:

• Economic Reality of the Transactions: We provide documentary evidence that sales were carried out at market price or that corporate restructurings had a lawful, non-fraudulent cause.
• Application of the "Business Judgment Rule": We argue that business decisions taken in good faith, with sufficient information and without personal interest, do not constitute criminal intent even if they turn out to be prejudicial.
• Challenging the Causal Link: We work to show that the insolvency was due to external causes (a sector-wide crisis, the pandemic, or a supply-chain breakdown) rather than to the debtor's conduct.
• Coordination Between Criminal and Commercial Proceedings: We simultaneously handle the classification of the insolvency proceeding (concurso de acreedores) to prevent it from being declared "culpable" (at fault), which would drastically weaken any future criminal case.

4. Forensic Analysis and Technical Evidence

Unlike other approaches, at RAKH Abogados we base our strength on the documentary traceability of every euro. We work with forensic accounting experts to build a technical economic narrative that justifies the management decisions before the judge, always seeking dismissal of the case or acquittal.

Is your company in a critical situation or under judicial investigation? Do not let a financial crisis become a criminal conviction. At RAKH Abogados we defend your interests with rigor and specialization throughout Spain.