Pre-insolvency filing and refinancing agreements

Abstract

In this paper, the authors develop the content of Articles 5 bis, 71.6 and of the fourth additional provision of Ley 22/2003 Concursal of July 9th (Spanish Insolvency Law), taking into account the amendments introduced by Ley 38/2011 de Reforma de la Ley Concursal (Spanish Insolvency Law Reform).

Furthermore, the paper presents the concepts included in each provision and indicates the advantages and disadvantages of filing a pre-insolvency notice. It also makes reference to the necessary requirements that refinancing agreements have to meet in order to conform to the Spanish Insolvency Law legal framework. Moreover, this paper analyzes the privilege of fresh money and the requirements and advantages regarding judicial approval of refinancing agreements.

Given the serious situation that enterprises and households are experiencing nowadays, the aforementioned concepts are matters of great importance in the current Spanish economy. These concepts could be applied to either of them and especially to SMEs. As indicated throughout the paper, despite the advantages offered, a number of drawbacks have to be taken into account before making a decision, which in any case, will greatly affect the future of society.