Regulation No. 2015/848 is an update and an enhancement of European Union rules on cross-border insolvencyprocedures, with respect to Regulation No. 1346/2000 currently applicable. We start here a series of newsletters wherewe will address the new rules which will come into effect starting from 2017.

Two recent decisions of the Court of Rovereto (16 July 2015) and of the Court of Rimini (1 October 2015) reached opposite conclusions.

The case

The Court of Como, by order of 27 May 2015, authorised the Judicial Liquidator to settle the dispute with  the lawyer who advised the company in the concordato preventivo procedure, and this even against the advice of the Creditors’ Committee.

The case

With the decision of 16 September 2015, No. 18131, the Court of Cassation settled a long-standing debate, ruling that the trustee can not terminate an agreement to sell real estate property, entered into by the company which is later declared bankrupt, if the purchaser has registered with the Land Registry, before bankruptcy, its claim to the Court to be transferred title to the property.

The case

The Tribunal of Modena with a decision of 6 June 2015 stated that a supplier can not refuse to perform its obligation and ask for the payment of previous claims by raising a non-fulfilment of the debtor’s obligations objection. Payment of such claims can then be made only after confirmation of the concordato by the Court.

The case

The Tribunal of Milan, with a decision of 5 May 2015, ruled that Art. 104-ter of the Italian Bankruptcy Law is applicable to the lease of business entered into before the declaration of bankruptcy and, therefore, the receiver can terminate pending contracts according to Art. 72 of the Italian Bankruptcy Law

The case

With the decision of 2 September 2015, No. 17461, the Court of Cassation confirmed that secured creditors’ deferred payment amounts to a partial satisfaction and has confirmed the criteria for determining the economic loss arising out of the delay, for allowing these creditors to vote.

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

Lawmakers introduce further measures in order to stimulate new loans after the pre-filing for concordato preventivo or for a debt restructuring agreement, when it is urgent to prevent an unrecoverable prejudice to the business

The context