Newsletter about last modifications of the Insolvency Law

Insolvency Newsletter. Author: Ramón Fernández-Aceytuno.

This newsletter summarises the most significant aspects of Law 38/2011, which modifies the Insolvency Law (Ley Concursal, or “LC”). 1. Elimination of Article 5.3 and addition of Article 5 bis: ? Notification by the creditor may be to announce negotiations to gain support for a proposed arrangement; the novelty is that it may also mark the initiation of negotiations to reach a refinancing agreement. The judge will only ensure that the notification is on record. ? When three months have elapsed after the notification, the insolvent debtor must apply for declaration of insolvency (within a period of one month) regardless of whether an arrangement or agreement has been reached, unless it is no longer insolvent. That is, if the insolvent debtor reaches an arrangement with its creditors within a term of three months, it is not obliged to apply for declaration of insolvency.

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