Agreements and insolvency privileges of refinancing in the Insolvency Draft Act

Simple financing
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Article 5 bis of the ID maintains the purpose of the former article 5.3 of the Spanish Insolvency Act (LC, as per its initials in Spanish) on the pre-insolvency communications regarding negotiations aimed at avoiding the insolvency proceedings. But the system is improved. The ID confirms the majority case-law, which exempted the judge from assessing the reliability of this communication, the situation of insolvency or the existence of effective and projected negotiations. The sole communication –which the court clerk only puts on record-, postpones in four months the timelimit for applying for insolvency proceedings, except in case the negotiation had led to eliminate the situation of insolvency.