##  [Restrictions for prior notice under article 5 bis of the Insolvency Law (‘pre-insolvency’ mechanism)](/en_GB/new/restrictions-prior-notice-under-article-5-bis-insolvency-law-pre-insolvency-mechanism) 

# Restrictions for prior notice under article 5 bis of the Insolvency Law (‘pre-insolvency’ mechanism)





Spain - 12 / 10 / 2019

















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**On September 10, 2019, Madrid Commercial Court number 6 delivered a decision arguing that it was necessary to examine whether the prior notice under article 5 bis of the Insolvency Law stemmed from steps taken to prepare or perform serious and effective negotiations.**





The court concluded that in this particular case the notice was unfair and must be considered not to exist because its only aim was to stop a mortgage foreclosure proceeding. The pre-insolvency notice was not found by the court to be a serious, solution-seeking and reasonable attempt to secure a refinancing of the debtor’s liabilities because the main financial creditor, owning more than 90% of the liabilities, was not amenable to a refinancing arrangement because it had initiated a mortgage foreclosure.









[Restructuring &amp; Insolvency](/en_GB/tags/restructuring-insolvency), [Spain](/en_GB/tags/spain)







 

 



 

 

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