News

Alitalia (update 2): the benefits of acquiring a Company under extraordinary administration

May 17 2017

Authors: Antonello Corrado, Silvia Viceconte

As outlined in our previous newsletter dated May 3, the extraordinary administration is a particular procedure of public importance for the sale of large insolvent companies, subject to special rules (Law Decree no. 347/2003 and Legislative Decree no. 270/1999) that may derogate from general private law.

Antonello Corrado
Silvia Viceconte
 

In addition to certain obligations charged to the buyer, due to the strategic national importance of the sold company, the legislation provides some undeniable advantages when purchasing part or the entire business perimeter within the context of the public procedure.

Let's define some of them.

  • The principle that the buyer must ensure the business continuity for at least two years and maintain for the same period the employment levels laid down in the sale agreement is balanced by the faculty to agree, during the mandatory labor consultations provided for in art. 47 Law 428/1990, on the partial transfer of employees to the buyer. Likewise, further changes to the working conditions may also be agreed within the limits permitted by the applicable regulations.
  • Personnel transfers, even partial, to the buyer can also be made upon the placement in the extraordinary redundancy fund or, alternatively, through the termination of the existing relationship and the hiring by the buyer.
  • According to art. 4, paragraph 4-sexies, Legislative Decree 347/2003, the admission to the extraordinary administration procedure does not involve the loss of authorizations, certifications, licenses, concessions or other securities for the exercise of the business of the insolvent company; such titles are, therefore, automatically transferred to the buyer in case of purchase under the extraordinary administration procedure.
  • Art. 63, paragraph 5, Legislative Decree 270/1999 provides the general principle which excludes the buyer's liability for the debts relating to the business of the transferred company prior to the date of the transfer.
  • Following the transfer, the cancellation of the registrations relating to pre-emption rights and the transcripts of foreclosures and seizures that may be present on the transferred business assets is ordered by ministerial decree.

The normative provisions briefly described above appear to be appropriate to ensure a fair compromise between the need to protect the general interests such as safeguarding the company's employment and business continuity and the economic freedom of the buyer interested in the purchase of the company.

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