The Tribunal of Milan allowed a concordato preventivo proposal to be amended, providing that additional resources for the creditors could be made available through a lien on real estate property belonging to a shareholder of the company.
The case
NCTM Studio Legale Associato assisted a company in filing and subsequently amending a concordato preventivo proposal before the Tribunal of Milan.
New rules for the competitive bid process aimed at the sale of the debtor’s assets in each phase or type of concordato preventivo procedure, which can now take place even before the confirmation order of the Court.
Competitive sale of debtor’s assets
The Italian Government further integrated the rules applicable to debt restructuring agreements, allowing the debtor to cram down the agreement also to dissenting minority lenders, in two different frameworks: a) stand-still agreements for a “temporary moratorium” pending negotiations, and b) the actual agreements for the rescheduling and restructuring of the outstanding debt.
The Court Monza decided upon a petition filed by the managing director of a company, after confirmation of a “concordato preventivo con continuità aziendale” proposal, seeking an authorization to perform certain acts not in the ordinary course of business.
The case
Art. 57 para. 6-bis TUF (introduced by Legislative Decree No. 42/2012) provides for a special procedure of judicial liquidation of investment funds in an insolvency situation, where debts cannot be satisfied in full out of the fund’s assets, but does not state whether investment funds are eligible for concordato preventivo as an alternative to liquidation.
The issues
The Court of Cassation with the decision of 28 April 2015, No. 8575 ruled that no amendment to the concordato plan orproposal, even though more favourable to the creditors, can be made by the debtor after the end of the voting process,in a case, though, where the decision could have been influenced by the fact that the debtor himself had waived its rightto confirmation of the concordato proposal.
The case
Lawmakers made a few changes to the concordato rules with the foreseeable result of restricting significantly the access by debtors to the procedure, shifting the main focus from liquidation plans to schemes allowing to preserve the business as a going concern
New rules introduced upon conversion of Art. 4 of law decree No. 83/2015
Creditors being now allowed to make competing concordato proposals restricts the exclusive powers of the debtor, which are now limited to the choice to commence the procedure, while on the other side it is now always mandatory that a competitive bid process is carried on for the sale of business units and assets, when the proposal of the debtor provides for an already designated buyer
Concordato competing proposals by creditors
A focus on the different interpretations concerning the treatment of claims for costs allocation in legal proceedings where a creditor is successful against a debtor admitted to a concordato preventivo procedure
The issue
The Court of Padua (6 March 2015) ruled that the authorization can be granted – provided that it is a case of urgency as required by law – only to the extent that the interests of creditors are best protected, through a competitive sale procedure setting a reasonable timing and an appropriate data room.
The case