Italian Company Formations | Liquidation and Insolvency of an Italian company

11 September, 2007

Liquidation and Insolvency of an Italian company.

Liquidation and bankruptcy procedures are respectively governed by the Civil Code and by the Royal Decree No 267 of 1942 (the ‘Bankruptcy Act’).It has to be noted that the Legislative Decree No 14/2019 providing for the new Code of corporate crisis and insolvency, will definitively enter into force on August 15, 2020 and will amend few dispositions of such matter.

Italian Civil Code, art 2484 specifies the circumstances according to which which a company in Italy can be wound up. This document sets out these circumstances.

Conditions for winding-up

Article 2484 of the Civil Code specifies the circumstances in which a company can be wound up:

(a) expiry of the term set out in the articles of association;

(b) achievement of the corporate purpose or impossibility to achieve such purpose, unless the share/quota holders meeting resolves to amend the by-laws;

(d) losses reducing the company’s corporate capital under the minimum provided by the Civil Code;

(e) in case of withdrawal of share/quota holder, if the company has not sufficient available reserves to reimburse the shares or the quota;

(f) voluntary liquidation resolved by the members;

(g) any other cause provided in the articles of association.

A company can also be wound up for other causes provided by the law.

In addition, SapAs can be liquidated if all the `accomandatari’ cease to act and are not replaced within six months.

Under Italian company law, voluntary liquidation must be resolved upon by the extraordinary shareholders’ meeting with the favourable vote of the majority of the corporate capital. This document explains voluntary liquidation in Italy, considering the following: decision to wind up the company; appointment and function of liquidators; winding-up procedure; completion of voluntary winding up; liability of members; and priorities among creditors.

Voluntary Liquidation

1 Decision to wind up the company

Voluntary liquidation must be resolved upon by the extraordinary shareholders’ meeting with the favourable vote of the majority of the corporate capital. Minority share/quota holders can challenge such a decision, on the basis that it represents an abuse of power, is contrary to the best interest of the company or that there is some underlying fraudulent intent of the majority. Under specific circumstances employees can also challenge the decision to voluntarily wind up the company.

A resolution to wind up a company must be filed with the Registry of Enterprises within 30 days from the date is passed.

Appointment and function of liquidators

Once the decision to wind up the company has been taken, one or more liquidators must be appointed to replace the directors. Liquidators oversee the liquidation procedure and are appointed by the shareholders with a favourable vote of the majority of the corporate capital. If the liquidator(s) are not appointed with the same resolution to wind up the company, the directors remain in office, but are prohibited from entering into new transactions on behalf of the company during the period between the winding-up resolution and the appointment of the liquidator(s). Directors may be jointly and severally liable for the damage suffered by the company as a result of any transaction undertaken in breach of the above prohibition. Until the appointment of the liquidators, the directors maintain the power to manage the company only for the purposes of preserving the integrity of the company’s assets. Generally, directors are also under a duty to preserve the assets of the company before a liquidator is appointed.

Unless otherwise provided in the by-laws or adopted at the time of their appointment, liquidators shall have the power to take all appropriate measures to wind up the company. Their liability for damages arising from failure to comply with their duties is governed by the rules on directors’ liability. The liquidator has the directors’ powers and will be subject to supervision by the statutory auditors. Directors and share/quota holders can be nominated as liquidators.

Winding-up procedure

The liquidators must draw up the financial statements and present them at the deadlines set for the approval by the shareholders’ meeting. Directors should assist the liquidators in drafting an inventory of the company’s assets, using established valuation principles at the date of the winding-up resolution. The liquidators have the power to perform all the actions relating to the liquidation including the power to sell all or part of the company’s assets, and to make settlements, but are not permitted to enter into new transactions. If they do enter into new transactions, liquidators will be held personally, jointly and severally liable for them. Liquidators cannot distribute the company’s assets among the share/quota holders until all creditors have been fully paid. The extraordinary shareholders’ meeting can grant the liquidators different powers.

Completion of voluntary winding up

Once the company’s creditors have been paid, the liquidator will prepare a final liquidation statement with an indication of the amount due to each shareholder or share in the division of assets. . The final statements signed by the liquidators together with the report of the statutory auditors (if any) and the entity in charge of auditing the accounts are deposited at the office of the Companies Register. Shareholders have three months from the date the final liquidation balance sheet to challenge it before the court where the company has its registered offices.

Absent any litigation, the liquidators can proceed with any asset distribution. Thereafter, the liquidator will request the cancellation of the company from the Registry of Enterprises. The company’s books must be deposited and kept for ten years at the Company Register Office.

Liability of members.

After the company has been cancelled from the Register of Enterprises, the members may be held liable vis-à-vis those creditors who remained unsatisfied or not completely satisfied only within the limit of the amounts received (if any) by each member on the basis of the final liquidation balance sheet. This is a consequence of the application of the rule under which creditors must be paid in full before any distribution can be made to the members.

Priorities among creditors

In any case of liquidation of a company, either as a result of its winding up or of its bankruptcy, creditors are equally entitled to be satisfied with the debtor’s assets except in cases of legitimate priority. The general principle is that all creditors must be treated equally and have the right to the equal settlement of their claims, but, with the reform of bankruptcy law, this principle has become less stringent, as it is now possible to divide creditors by homogeneous classes, such as financial creditors and suppliers. If the assets of the company are insufficient to satisfy all claims, the creditors suffer an equal and proportionate reduction in their rights within each class.

Where the company is subject to bankruptcy proceedings, the Bankruptcy Law of 1942 provides that certain transactions are void unless the other party can prove that it was not aware of the company’s insolvency status at the time the transaction was entered into. These transactions may be subject to the bankruptcy revocation rules. According to article 67 of Royal Decree No 267 of 1942:

(a) Acts carried out free of charge by the bankrupt in the two years preceding the declaration of bankruptcy (excluding gifts of use and acts carried out in fulfilment of a moral duty or for purposes of public utility, in so far as the donation is proportionate to the donor’s assets) are always revoked. The same applies to payments of claims which are due on the day of the declaration of bankruptcy or later, if made by the debtor in the two years preceding the declaration of bankruptcy.

(b) Transactions entered into within a year before the bankruptcy’s declaration under which the obligations undertaken by the bankrupt company considerably exceed the rights it receives are revoked;

(b) any extinction of debt due to the company by means other than payment in cash or other normal means of payment entered into within a year of the company’s bankruptcy’s declaration are revoked;

(c) any pledges, charges or mortgages entered into within a year before the company’s bankruptcy declaration to secure pre-existing indebtedness which had not, at the time, fallen due are revoked; and

(d) any pledges, charges or mortgages (whether established voluntarily or by operation of law) entered into within six months before the company’s bankruptcy declaration to secure debts which had, at the time, fallen due are revoked.

Furthermore, if the liquidator can prove that the other party was aware of the company’s insolvency, all payments of debts and any transaction creating a charge or security for debts are void if entered into within six months before the company’s bankruptcy declaration.

Under Italian company law, there are various remedies which relate to companies with liquidity problems, the availability of which depends largely on the severity of the financial difficulties in which a company finds itself. This document considers these remedies, as follows: judicial moratorium (amministrazione controllata) (abolished); bankruptcy (fallimento); agreement with creditors; compulsory administrative liquidation (liquidazione coatta amministrativa); and extraordinary administration of large businesses (ammistrazione straordinaria delle grandi imprese in crisi).

Insolvency

There are various remedies which relate to companies with liquidity problems, the availability of which depend largely on the severity of the financial difficulties in which a company finds itself.

Bankruptcy (‘Fallimento’)

Bankruptcy proceedings apply when a company who carries on a commercial activity and who possesses the dimensional requirements provided for by law becomes insolvent. Insolvency, under article 5 of Royal Decree No 267/1942, occurs when the company faces cash flow issues and is unable to pay its debts on a regular basis.

An application for a declaration of bankruptcy may be made by the company itself, a creditor of the company, or the public prosecutor if the insolvency results from criminal proceedings, or from the escape, absconding or unavailability of the entrepreneur, or it is reported by the judge who discovered it in the course of civil proceedings. The application should normally be made to the court where the company’s registered offices are located.

If all the legal requirements are satisfied, the court will make a declaration of bankruptcy. Upon declaring the bankruptcy, a court will:

(a) appoint a delegated judge (‘giudice delegato’) to oversee the execution of the bankruptcy procedure;

(b) appoint a curator (‘curatore’);

(d) invite creditors and third parties to file their claims against the company; and

(e) fix a date for the first creditors’ meeting.

Bankruptcy orders made in other countries will be recognised in Italy pursuant to the conflict of laws rule in Law 218 of 32/05/1995. Additionally, the EU regulations on insolvency proceedings are directly applicable to Italy.

The bankruptcy will have the effect of depriving the directors of any power to manage the business or dispose of the company’s assets. Directors will remain in office, but with an insignificant role in the management of the company. The statutory auditors will also remain in office, but with reduced powers. All correspondence must be directed to the curator.

The curator is chosen among the subjects enrolled in a special register established at the Ministry of Justice. The curator can be assisted by their staff, but under their responsibility.

The duties of the curator are essentially to assess the company’s assets and creditors’ claims, to inform the court of the company’s liabilities by drafting a report on these, and to settle the creditors’ claims and dispose of the company’s assets. The curator will be subject to the direction of the delegated judge, although will be able to act independently in the exercise of his/her normal responsibilities, only being obliged to seek the judge’s approval for extraordinary transactions. The curator will be entitled to payment for services and reimbursement of costs.

The delegated judge sets up a creditors’ committee (‘comitato dei creditori’), composed of three or five members. The advice of the committee must be sought in certain circumstances by the delegated judge or the court (for example in the examination of proposals for a composition agreement), and the committee will also act as a further check on the process of liquidation, inspecting the accounting books and seeking information from the bankrupt and the curator.

The curator will make an inventory of the assets of the company before going on to assess the liabilities. The curator will specify terms within which creditors or third parties must submit their claims against the bankrupt company and, once such claims have been submitted, will prepare a balance sheet of liabilities. Under certain circumstances, this assessment of liabilities can be challenged by creditors and third parties.

[There are complex provisions in relation to claw-back actions. Any transaction for no consideration which occurred in the two years prior to the bankruptcy could be voided by the curator.

The curator may seek to set aside the following transactions subject to the applicable limitation period and subject to the condition that the third parties to the transaction are not able to prove that they ignored the insolvency status of their counterparty:

(a) any transaction for consideration, entered into in the year preceding the declaration of bankruptcy in which the obligations undertaken by the distressed company are valued more than 1/4 of the value of the consideration received in exchange;

(b) any repayments in kind of debts due in year prior to the bankruptcy;

(c) any security granted by the insolvent company in the year before the bankruptcy to secure pre-existing debts not yet due;

(d) the repayment of debts, the transactions for consideration and the secured transactions undertaken in the six months preceding the bankruptcy if the curator is able to prove that the opposing party was aware of the insolvency status at the time of the transaction.

Within sixty days from the compilation of the inventory and in any case no later than one hundred and eighty days after the declaration of bankruptcy, the liquidator shall prepare a liquidation plan to be submitted to the approval of the committee of creditors. Before approving the programme, the curator may liquidate assets, with the authorisation of the delegated judge and after consulting the committee of creditors if already appointed, only if the delay may prejudice the interests of creditors. Furthermore, the curator, with the authorisation of the committee of creditors, may not acquire assets or waive the liquidation of one or more assets, if the liquidation is not convenient. Foreign and Italian creditors rank equally. Once the programme has been approved, it shall be communicated to the delegated judge, who shall authorise the execution of the acts in accordance with it. The general order of priority is the costs of the bankruptcy (which are subject to authorisation by the court), followed by privileged or secured creditors (which have a priority established by the nature of the security they have over the debt), or unsecured creditors, whose claims are generally satisfied in the following order:

(a) employee remuneration (including severance indemnities);

(b) claims by independent contractors for work carried out in the previous 12 months, agency commissions and compensation for termination of agency;

(d) debts to farmers;

(e) debts owed on machinery and equipment;

(f) income taxes;

(g) local taxes; and finally

(h) shareholders.

The curator has the option to terminate the bankruptcy procedure by means of a settlement (‘concordato fallimentare’) under which creditors are offered to receive payment of part of their debts. The offer is subject to the approval of the delegated judge, who orders communication to creditors, setting a time limit within which they can send any statements of disagreement. If not, they shall be deemed to have agreed to the following. The agreement is approved if it receives the favourable vote of the creditors representing the majority of the claims eligible to vote. Once the time limits for opposition have expired or the appeals are finished, the proposal becomes effective and the composition becomes mandatory for all creditors prior to the opening of the bankruptcy (including those who have not filed an application for admission to the liabilities), without prejudice to the possibility for them to act for the entire claim against the co-obligated, the guarantors of the bankruptcy and the obligated in recourse.

Agreement with creditors

As an alternative to the bankruptcy procedure, a distressed company may enter into a composition agreement with creditors (‘concordato preventivo’). Commercial entrepreneurs, collective or individual, subject to bankruptcy, may recourse to an arrangement with creditors in the event of a state of crisis or insolvency. Benefiting from the composition agreement may avoid bankruptcy by proposing a plan to satisfy creditors through business continuity or liquidation of assets. A company can enter into a composition agreement by filing an application for admission to the procedure before the competent court. This can be done at any time up to the date a declaration of bankruptcy is made. The application documentation should contain the company’s accounts, an analysis of the assets and liabilities of the company, a list of creditors and a restructuring plan. However, as a result of amendments introduced by Law Decree no 83 of 22 June 2012 (as confirmed by Law no 134/2012), the company may file an application for the composition with creditors simply attaching the latest three financial statements, postponing to a later time the filing of the proposal, the plan and the documents to be annexed thereto. These other documents must be filed within a term fixed by the delegated judge (from 60 to 120 days), which term can be extended by an additional 60 days maximum..

The court will review the application. Rejection will result in a bankruptcy order being made, while acceptance of the application will begin the composition agreement procedure. A delegated judge and a judicial commissioner will be appointed and a creditors’ meeting fixed. The company will also be ordered to deposit the 50% of the estimated expenses necessary for the entire proceedings or such other lower amount as may be determined by the Court, which shall not be less than 20% of those expenses. Among the advantages deriving from admission to this procedure, it is provided that the relevant payments and refunds made in accordance with this procedure may not be challenged by a `bankruptcy claw-back action’ (`azione revocatoria fallimentare‘) in the event that the distressed company becomes bankrupt. In order to protect the company from actions of creditors during the procedure, enforcement and interim actions are also prevented.

In the case of a continuous agreement, the debtor may benefit from a moratorium of up to 2 years from the approval in order to pay creditors with a lien, pledge or mortgage under the condition that the plan provides for the liquidation of the assets or rights on which there is the pre-empty right.

Furthermore, the company may request the court authorise it to enter into new loan agreements, the relevant credits arising out of which benefit from a priority status in the event that the company becomes bankrupt. However, an expert appointed by the company must certify that such new loan agreements are in the best interests of the creditors. The expert’s report is not necessary in urgent cases, where the Court found it necessary to take prompt action in order to avoid causing serious and irreparable damage to the business activity. This provision is clearly intended to encourage potential lenders to grant loans to the company so as to facilitate its restructuring.

The Decree Law 83/2015, art. 182-quinquies introduced the discipline of the bankruptcy law, which provides for the possibility for the company in crisis to access credit to resolve urgent needs relating to the company’s business. In this case the application must specify the destination of the financing, the impossibility for the debtor to find it in another way and the irreparable prejudice for the company in the absence of these.

Moreover, because companies facing a `concordato preventivo‘ often incur significant capital losses, by Law Decree no 83 of 22 June 2012 (as confirmed by Law no 134/2012) the mandatory laws on capital losses set out in the Italian Civil Code – requiring a prompt recapitalization in case of capital losses exceeding 1/3 of the corporate capital – do not apply if the company has filed a petition for `concordato preventivo‘ until the petition is finally approved by the court.

Within 30 days from the opening of the procedure, a creditors’ meeting must be called. Secured creditors which would be fully paid under the proposed composition agreement may neither participate in the meeting, nor vote. Proxies are permitted. The procedure must be approved by the majority of the creditors entitled to vote and by the majority of the creditors’ classes (if more than one class of creditors is described in the draft composition agreement). Failure to approve the composition agreement will result in a bankruptcy declaration being made by the court. In the event that the resolution is passed, there will be a hearing before the court in which the court will ensure that the conditions for admission still exist and that the procedural formalities have been observed. The court may at this stage reject the application, which will result in a declaration of bankruptcy.

Once admitted to the procedure all payments to creditors included in settlement will be suspended. Directors will continue in office, but will be subject to monitoring by the judicial commissioner appointed by the court. Exceptionally, the debtor is allowed to apply to the Court for authorisation to pay earlier debts in respect of the supply of goods or services. The request may be made in the case of agreement among creditors enabling the continuity of the business and must be supported by a report from an independent professional that certifies that the supplies of goods or services are essential for the pursuit of the business activity and are instrumental in ensuring the best satisfaction of creditors. If in the past the most common method of implementing a composition agreement with creditors was the liquidation of the company’s assets in order to pay the same creditors in cash, further to amendments introduced by Law Decree no 83 of 22 June 2012 (as confirmed by Law no 134/2012) it has been expressly introduced a specific regulation for a composition with creditors where the specific purpose is to continue the company’s business. In this regard the main innovations are:

(i) the opportunity to participate in tenders aimed at entering into contracts with public bodies,

(ii) the inapplicability of clauses entitling a counterparty to terminate an agreement due to the other party’s financial crisis, and

(iii) the possibility to postpone by one-year payments to secured creditors

For this purpose, the composition agreement plan must contain an analytical description of the costs and revenues expected from the continuity of the business activity and of the necessary financial resources. Furthermore an expert appointed by the company must certify the feasibility of the composition agreement plan expressly stating that business continuity of the company is able to better satisfy creditors’ rights than the business’ liquidation.

With reference to the still pending agreements, the company may request the court to (a) terminate agreements pending as of the date of the filing of the petition, and/or (b) suspend the performance of (one or more) agreements for a maximum of 60 days(only one extension could apply); these provisions shall not apply to employment relationships or to the agreements referred to other articles provided in for by the Bankruptcy law. In this case, the other contractual party will be entitled to an indemnification equal to the damages arising out of the non-performance of the agreement. The court will appoint a liquidator for the purpose of managing the composition with creditors and his/her activities will be supervised by a panel made up of three or five creditors.

Creditors with a lien, pledge or mortgage may be satisfied even if they are not fully satisfied, provided that they are not paid less than that which may be obtained from the liquidation of the assets or rights in respect of which there is the pre-emption right. The composition agreement will be enforceable vis-à-vis unsecured creditors which will be prevented from taking any action for the recovery of their claims under the composition agreement. Creditors whose receivables arose after the admission to the composition agreement procedure are entitled to be paid in full. If the debtor fails to satisfy its obligations under the composition agreement the company will be declared bankrupt.

Compulsory administrative liquidation (‘Liquidazione coatta amministrativa’)

This liquidation procedure applies to banks, investment businesses, financial intermediaries, insurance companies and co-operatives. It can only be applied for by the administrative body which has responsibility for regulating the business concerned, and may be requested when:

(a) the business is insolvent (the most common reason);

(b) there are management irregularities for serious or repeated violations of laws or regulations; or

When insolvency is the ground for the application, the court of the specialised sections on business matters will ascertain whether insolvency exists and issue a decree accordingly. The regulatory body making the application will nominate a liquidation commissioner (‘commissario liquidatore’) who will carry out the liquidation. For complex or large businesses, as many as three such commissioners may be appointed. The regulatory body will also nominate a supervisory committee (‘comitato di sorveglianza’) of either three or five members from among experts in the field in which the business in question operates, which will play largely the same role as the creditors’ committee does in bankruptcy proceedings.

The effect of the declaration of compulsory administrative liquidation is similar to that of bankruptcy: the company will stop trading, the directors will lose their powers, the company’s assets will be liquidated and sums derived therefrom will be used to settle the company’s liabilities.

Extraordinary administration of large businesses (‘Ammistrazione straordinaria delle grandi imprese in crisi’)

This procedure is aimed at assisting large businesses in financial trouble to restructure their debts and to continue their operations.

Conditions for admission to the procedure are:

(a) the business is insolvent;

(b) the business has employed at least 200 people in the year preceding the application for admission to the procedure;

(d) there are real prospects of recovery either through the sale of the business as a going concern within one year or the restructuring of the business in a reorganisation which will last not more than two years.

The court will determine if the conditions for admission to the procedure exist. Upon issue of the decree admitting the company to the procedure, the court will appoint a delegated judge and one or three judicial commissioners (nominated by the Ministry of Industry).

The `amministrazione straordinaria delle grandi imprese in crisi’ has been largely amended by Law Decree No 134/2008 (see para [701]).

Upon admission to this special procedure, the management of the procedure as well as of the company is undertaken by one or three special commissioners (‘commissario straordinario’). The powers of the directors will be suspended and no action may be taken by creditors for the recovery of their debts from the company. Debts incurred during the procedure may, however, be paid as they fall due.

There will be a supervisory committee of three or five members made up from experts in the company’s field of business (at least one or two of whom must be appointed from among the creditors of the company).

Extraordinary administration will end when the restructuring project is complete (in which case a court will declare closure and the various special administrative bodies will cease to function), or when such efforts at restructuring have failed and bankruptcy occurs.

As part of this commentary on company liquidation or bankruptcy under Italian law, this document discusses the following reforms: debt restructuring agreements; implementing a restructuring plan; and voluntary liquidation.

Reforms

Debt restructuring

Law No 80/2005 introduced the debt’s restructuring agreements (in Italian ‘accordi di ristrutturazione dei debiti’) governed under article 182 bis of the Bankruptcy Law. A company facing cash flow issues can benefit from the following procedure:

(a) a debt restructuring agreement is entered into with creditors representing at least 60% of the overall debts of the company. Such an agreement is binding exclusively on the creditors who executed it while non-executing creditors will retain in full their rights vis-à-vis the debtor. Especially, pursuant to amendments introduced by Law Decree no 83 of 22 June 2012 (as confirmed by Law 134/2012), non-executing creditors must be entirely repaid (i) within 120 days of court’s approval, in case of receivables already expired by this date or (ii) within 120 days from the date when the receivable becomes due if it has not yet expired by the date of the court’s approval. Furthermore, under certain conditions, debts vis-à-vis the tax authorities could be included in the debt restructuring agreement (`transazione fiscale‘);

(b) the debt restructuring agreement is enforceable upon the filing of the same with the Register of Enterprises; during the 60 days following the registration of the agreement with the Register of Enterprises, creditors are prohibited from taking any action over the assets included in the debt restructuring agreement; after this period creditors who did not execute the debt restructuring agreement are entitled to take any action they deem appropriate. However, also during the negotiations aimed at signing a debt restructuring agreement, the debtor can file a request with the competent court in order to prohibit creditors from bringing any enforcement and interim actions over its assets. For this purpose, the debtor must file a draft of the debt restructuring agreement which is going to be signed and a declaration issued by an expert concerning the capability of the draft agreement to completely satisfy the non-executing creditors under the debt restructuring agreement.

(c) following the registration with the Register of Enterprises the debtor shall file an application with the competent court to obtain the approval of the agreement by the court; the application must contain: (i) a copy of the registered agreement; (ii) a report on the financial conditions of the corporation; (iii) the list of creditors; (iv) the list of secured creditors; (v) a report from an accredited expert confirming that the agreement has been structured in a way to satisfy all the creditors (including the executing and the non-executing ones);

(d) an approved agreement can be challenged within 30 days from its approval by the court;

(e) in any case the court will analyse the debt restructuring agreement, along with its attachments, and eventually approve it if all the applicable conditions are met.

Law Decree No 78 of 31 May 2010 (converted into Law No 122 of 30 July 2010) introduced new provisions regarding `new’ or `bridge’ financings to be obtained by the distressed company. In particular:

• credits related to new financings granted in view, or for the implementation, of a debt restructuring agreement duly approved by the court have priority status in the event of subsequent bankruptcy of the distressed company;

• credits related to new financings granted by share/quota holders in view, or for the implementation, of a debt restructuring agreement duly approved by the court have a priority status up to 80% of the amount financed.

The Legislative Decree 83\2015 converted with the Law 132\2015 introduced art. 182 septiesin the bankruptcy law, which regulates debt restructuring agreements with financial intermediaries and standstill agreements. This provision provides that the effects of agreements which are functional to the overcoming the business crisis, if approved by a qualified majority of banks and financial intermediaries, are extended to banks and non-member intermediaries. The applicability of the regulations requires that the company has debts to banks and financial intermediaries in an amount equal to or greater than half of the total debt. The court approves the agreement after verifying that the banks and the coercing financial intermediaries may, under the agreement, be satisfied to no lesser extent than the available alternatives. It is also envisaged that the moratorium agreement concluded with a qualified majority of financial creditors may also be binding on non-member banks and financial intermediaries in order to speed up negotiations.

Restructuring plans

Article 67, paragraph III, letter (d) of the Bankruptcy Law sets forth an out-of-court procedure that allows a company to implement a restructuring plan. Payments and securities over the company’s assets granted for the purposes of performing the restructuring plan are not subject to bankruptcy claw-back actions in the event of the subsequent bankruptcy of the distressed company.

However, the restructuring plan causes the inapplicability of the claw-back actions only if certified by a professional expert duly appointed by the debtor.

In particular, according to the amendments introduced by Law Decree no 83 of June 22, 2012 (as confirmed by Law 134/2012) such expert is required to certify the trustworthiness of the company’s financial information (on which the plan is structured) and the feasibility of the restructuring plan. Furthermore, the expert must be independent vis-à-vis debtors of the company as well as against any other individual or entity involved in the restructuring process.

In addition and for the purpose of encouraging the reliability and fairness of the expert, a specific criminal provision was introduced enabling the prosecution of an expert providing false information or omitting to communicate relevant information in the certification process on the above.

Voluntary liquidation

Voluntary liquidation can be resolved by the extraordinary meeting of shareholders which will appoint the liquidators and grant powers to them. Liquidators, save where otherwise provided, have full powers to do whatever is necessary to achieve the liquidation of the company and may now also carry out new transactions.

Liquidators must file the annual financial statements. The accounts must include reference to the conduct of the liquidation both up to the date of the accounts and in the future and there are specific requirements for matters which must be included in the first of such accounts.

Under article 2495 of the Civil Code a creditor which has not been satisfied due to the action/omission of one of the members can file a claim against that member up to an amount equal to the sums received by the member under the final liquidation plan.

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