With the decision No. 1649 of 19 September 2017 the Court of Appeals of Catania followed the interpretation according to which a spin-off is not subject to the avoiding powers of a bankruptcy receiver

The case

A recent decision of the High Court (Goel and another v Grant and another [2017] EWHC 2688 (Ch)) has provided a useful reminder that care must be taken when administrators enter into pre-contract negotiations and the risk of inadvertently entering into a binding contract before terms are finalised. It also deals with the risks of disposing of assets, even those that are difficult to value, without due process.

The Facts

Applicable law

The Italian Government has been delegated to enact a comprehensive restatement of the whole set of rules of insolvency procedures, with specific innovative addresses regarding (to mention only the most important) the concordato preventivo procedure, venue rules, an out-of-court mediation alert process to timely address a risk of insolvency, new forms of security and a streamlined set of priorities among creditors

Introduction

Remuneration schemes involving Employee Benefit Trusts (EBTs) have become more prevalent over the last 20 years, often as a way of seeking to remunerate key employees without making pay as you earn or national insurance contributions. Given the developments highlighted below, insolvency practitioners are advised to investigate such schemes in matters coming across their desks to see whether funds can be clawed back for the benefit of creditors.

HM Revenue and Customs’ opinion on EBT schemes

The Court of Padua (15 June 2017) ruled that, in the procedure provided by Legislative Decree No. 270/1999, the three-year statute of limitations period provided by Art. 69-bis of the Italian Bankruptcy Law starts from the declaration of insolvency and not from the authorization of the plan for the sale of the business

The case

The Court with two recent decisions (6 April 2017, No. 8903 and 13 April 2017, No. 9547) confirmed that the Public Prosecutor is entitled to file for bankruptcy also in case he became aware of the insolvency in the course of a probe regarding other companies or individuals and within the concordato preventivo procedure.

The case

A decision of the Court of Rimini dated 1st December 2016 states that the competitive bid process provided by Art. 163-bis of the Italian Bankruptcy Law is not mandatory when there is a strict connection between the lease of business and a proposed third-party loan to support the concordato proposal

The case

The Court of Siracusa (5 June 2017) ruled that a pending lease of business contract continues on a regular basis, according to the restructuring plan, in case no bids are made according to Art. 163-bis of the Italian Bankruptcy Law

The case The debtor entered into a business lease contract with a third party before he filed for concordato preventivo.

On 27 July 2017 Law-Decree No. 99 of 25 June 2017 has been converted into law, which established special rules applicable to the «liquidazione coatta amministrativa»procedure, as well as the sale of the banking business units including assets and liabilities of the two banks, with the financial support by the Italian State. Nctm assisted Bank of Italy, the Ministry of Economy and the Liquidation Commissioners in the sale to Banca Intesa.