Reform of the Italian insolvency and pre-insolvency procedures approved by Italian Government
The long-awaited reform of the Italian insolvency and pre-insolvency procedures, together with the related provisions on security rights and privileges, has been approved by Italian Government.
Following a process started on 19 October 2017 when the Italian Parliament approved the delegation law n°155/2017, the new Italian insolvency legislation (so called “Codice della crisi di impresa e dell’insolvenza”) reforms all types of insolvency procedures, also amending the Italian Civil Code.
The new Italian insolvency law facilitate the intervention of foreign investors in distressed situations by means of the simplification of insolvency procedures and their harmonization with the European legislation, such as the EU Regulation 2015/848 and EU Commission Recommendation n. 2014/135/EU, and the UNCITRAL principles and guidelines.
In particular, the reform aims at favouring company reorganization over winding-up procedures and it introduces a “crisis alert system” which is an out-of-court procedure preserving the value of the business in continuity: companies in the early stages of a financial crisis apply to a special private crisis settlement panel for assistance in analyzing the reasons for the distressed condition, and in finding feasible solutions.
The publication of the new insolvency law in the National Official Law Gazette is now expected before the end of February 2019, and the entry into force of most of the provisions will be deferred over 18 months from its publication.
By Simone Olivetti, Delfino e Associati Willkie Farr & Gallagher LLP