The new Italian Crisis and Insolvency Code
Nov 29 2023 Giorgio CherubiniThe new Italian Crisis and Insolvency Code, 2019 (whose implementation was fully completed in 2023), has introduced significant changes aimed at preventing and resolving corporate crises, aligning with European business rescue norms. The Code views crises not necessarily as pathological but as challenges that can be overcome through recovery paths. Key features include:
Composizione Negoziata della Crisi: A new institution for negotiated crisis composition, supporting struggling businesses voluntarily and out-of-court. Initiated at the Chamber of Commerce, it is directed by a negotiator and allows for tax and social security transactions.
Debt Restructuring Agreements: These agreements have been modified, allowing businesses to restructure debts through creditor negotiations. This amendment, introduced during the validity of Royal Decree 267/1942, streamlines the process and applies haircuts to institutional credits through fiscal and social security cram-down.
Judicial Liquidation Discipline: Reforming the discipline of judicial liquidation, replacing the term "bankruptcy" as the final phase of insolvency. This process is more efficient, enabling quicker asset liquidation than before.
Additional modifications include:
- New rules for the responsibility of administrators and auditors of companies in crisis.
- New procedures for crisis alert and assisted composition.
- Revised regulations for preventive concordats.
These reforms represent a holistic approach to handling corporate insolvency, focusing on recovery and efficiency while ensuring fair dealings with creditors and stakeholders.
EXP Legal Restructuring and Insolvency Dept. is fully equipped to assist companies navigating the complexity of the new legislation.
