[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN ITALY] 44
KEY FACTS OF BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS UNDER ITALIAN LAW
1. Presentation of the judicial liquidation/ insolvency/ rehabilitation proceedings in Italy and their main characteristics. The current legislation for judicial liquidation, insolvency and restructuring proceedings has recently been reformed on February 14, 2019. On this date the New Code of Business Crisis and Insolvency has been published in the Official Gazette (Legislative Decree 12 January 2019 No. 14), replacing the Royal Decree n° 267/1942. The reform was initially to enter into force in its entirety on August 15, 2020, and then due to the pandemic emergency situation, the Law Decree 23 of April 8, 2020, containing “Urgent provisions to support companies’ liquidity and export” delayed the entry into force, as stated in article 6, to September 1, 2021, has once again been amended. In fact, in the first place, according to the Law Decree no. 118 - converted into the Law of 21 October 2021 n. 147, - the Company Crisis and Insolvency Code should have entered into force on May 16, 2022. After, according to the Legislative Decree no. 83/2022, the entry into force of the Company Crisis and Insolvency Code was set for July 15, 2022. (Legislative Decree no. 14/2019); According to the law, the procedures available to debtor and /or to creditors are: ➢ Judicial liquidation;
rescue plans, restructuring agreements and composition with creditors where the business continuity is envisaged. They can be used by the entrepreneur in a state of crisis or the phase of a company’s business life that puts the prospect of the continuation of the business at risk, if however, the rehabilitation is still possible. On the other hand, there are procedures aimed at the liquidation of the company's assets such as judicial liquidation and the composition with creditors for liquidation purposes, for the company in a state of insolvency or no longer able to regularly meet its obligations. Therefore, the procedures respond to different needs depending on the financial condition the debtor intends to use them. In addition to this difference, it is possible to find others always within the two macro-categories. In particular, the rescue plan, the restructuring agreements and the composition with creditors with business continuity differ regarding the treatment of creditors. In fact, while an agreement with creditors is not required in the rescue plan, in the restructuring agreements it is foreseen that the non-participating creditors must be paid in full and in the composition with creditors the approval of the proposal submitted by the debtor by so many creditors which are the majority of the credits admitted to the vote is required. Furthermore, while in the framework of debt restructuring agreements and the composition with creditors there is the possibility of entering into a so-called tax settlement, i.e., an agreement with qualified creditors for the payment, partial or even deferred, of taxes and related accessories. This possibility is excluded in the rescue plan. Another difference concerns the control of the judicial authority. In fact, while in the rescue
➢ Composition with creditors, ➢ Restructuring agreements, ➢ Rescue plans.
The main differences which allow to classify the procedures mentioned above in two macro groups reflect the purpose to which they are directed. On the one hand, in fact, there are procedures aiming to reorganize the company such as
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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