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
The Regulator has updated its guidance on assessing and monitoring the employer covenant in order to help trustees apply the defined benefit funding code of practice (“the Code”).
The guidance is intended to identify good practice for trustees in:
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
This article provides an essential update for insolvency practitioners on insolvency changes in 2015 and the proposed changes in 2016.
2015 Changes
The Small Business, Enterprise and Employment Act 2015
In recent times, the legal profession has undergone widespread changes at the bequest of previous governments. The most draconian measures have been in relation to the expense of professional services. These include a budgeting and costs management process which is the subject of judicial approval. In essence, service provider’s fees and expenses are estimated and capped in advance of them being incurred.
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
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