Avoidance of pre-insolvency overcollateralisation?

1. Overcollateralisation under Spanish legislation

(1) Our legislation prohibits (as unconscionable) clauses that, while not negotiated with consumers, require «collateral disproportionate to the risk assumed» (art. 88(1) of the Spanish Consumer and User Protection Act). Note that this rule has not been the subject of any case law development and that the clause that paradoxically could yield to art. 88(1) – namely, the punitive withholding of payments made by the buyer of property under a contract subsequently terminated by reason of the buyer’s default – has been clearly (and recklessly) deemed lawful by the Supreme Court’s judgment of 15 April 2014.(2) It is worth noting that overcollateralisation, provided such has been effectively negotiated by the parties and are not pre-arranged standard terms introduced by either one of such parties, is not deemed unconscionable even in consumer contracts. At the very least, the same must apply to company contracts, where, moreover, collateral packages are ordinarily negotiated on a case-by-case basis and the different negotiated collateral does not, except in marginal cases, constitute the content of a provision included in advance within a contract’s clauses. In other words, if you take, for instance, a pledge of receivables agreed in a separate contract, such pledge is not a «clause» of the debt master agreement providing for the granting of different collateral, including the aforementioned pledge.