Enterprise restructuring in Italy, legal options and business opportunities
By Claudio Ceradini, SLT – Studi Legali e Tributari
Since 2007, Italy has been facing one of the deepest and longest financial and industrial crises ever seen. The number of bankruptcies has grown very rapidly. Consequently, the government has decided to develop restructuring rules with new options offered to those companies which detected their situation promptly and decided to react with a recovery and turnover plan.
Three options are available, depending on the seriousness of the financial issues:
a) Certified turnover plan, where no legal composition or debt reduction are needed, but only as a protection for those who are involved with the company in order that they do not suffer any consequence;
b) Debt Reduction Agreement; to have some of the debt reduction agreed with creditors, confirmed by the court, and those creditors who do not agree paid in full within 120 days from court approval;
c) Creditors Composition Plan, to be filed in and run by the court and approved by 51% of creditors, eventually split into classes, providing a general debt reduction.
All options must be based on a financial plan disclosing the actions needed to bring the enterprise back to profitability, phase objectives, resources and control key goals and items. In particular, plans will be accepted and approved if a new company is committed to taking over the business liabilities and assets under court supervision.
All options are now in place and provide excellent opportunities for companies which decide for expansion plans through business takeovers, avoiding in this process material legal risks related to the seller financial situation.
SLT – Studi Legali e Tributari, Verona, Italy
T: +39 045 806 51 51
Claudio Ceradini is the major partner of SLT – Studi Legali e Tributari, working in the Business and Tax department as an auditor, business and tax advisor, as well as being an Adjunct Professor in Economics at Verona University. He has over 15 years’ experience in Business Restructuring and M&A, both for big and small companies. He is an author of many articles concerning the above subjects, published in dedicated magazines. Member of the Scientific Committee of Euroconference Group with responsibility for Restructuring, and is on the Editorial Board of Euroconference News (www.ecnews.it). Claudio is regularly requested as a speaker at conventions.
published: October 2014