Corporate Restructuring tools in Italy

A) Agreements in execution of Certified Recovery Plans (Accordi in esecuzione dei Piani Attestati di Risanamento)

 

The 2022 CCII code introduced a detailed regulation of the "certified recovery plan" (piano attestato di risanamento), which was previously not very regulated; it consists of a completely extrajudicial procedure which, under certain conditions, guarantees exemption from revocation claim ("azione revocatoria" is a claim for preserving the patrimonial guarantee, by which the creditor requests the revocation and consequent declaration of ineffectiveness of acts of disposition of his own assets carried out by the debtor, which reduce the creditor's guarantee) and criminal liability for the acts carried out in execution of the plan, in the event of any subsequent judicial liquidation.

 

This recovery plan is in favor of creditors, it must be suitable for recovering the company's debt exposure and ensuring the rebalancing of the financial situation; it is possible to use this tool only in the case of business continuity.

 

The plan, with attachments, must contain the report of an independent professional (auditor) who certifies the truthfulness of the company data and the economic feasibility.

 

The plan contains:

 

- strategic and operational actions to be implemented to rebalance the economic and financial situation of the company;

- cash flow projections resulting from these;

- indication of the times, methods and measures to satisfy creditors and rebalance the financial situation;

- indication of the economic, financial and financial situation of the company;

- indication of the main causes of the crisis;

- indication of the intervention strategies and the times necessary to ensure the rebalance of the financial situation;

- indication of the creditors and the amount of their credits to be renegotiated with them and the status of negotiations;

- indication of the contributions of new finance, if foreseen;

- indication of the expected times for the actions to be carried out;

- indication of the tools to be adopted in the event of deviation from the objectives set;

- the industrial plan and highlighting of its effects on the financial plan.

 

The restructuring plan, the auditor's certification and the agreements concluded with the creditors can be published in the business register at the debtor's request.

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B) Debt Restructuring Agreements (Accordi di Ristrutturazione dei Debiti)

 

The entrepreneur can independently conclude an agreement with the creditors and ask the judge for its approval, when he has obtained the consent of a number of creditors representing at least 60% of the credits.

 

The following documents must be filed with the agreement:

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- mandatory accounting and tax records;

- tax returns relating to 3 previous financial years or years or the entire existence of the business or economic or professional activity, if this has had a shorter duration;

- IRAP (Imposta Regionale Attività Produttive) declarations and annual VAT declarations relating to the same periods;

- balance sheets relating to the last 3 financial years;

- an updated report on the economic, patrimonial and financial situation;

- a detailed and estimated statement of his activities;

- certification regarding tax, contribution and insurance premium debts;

- list of names of creditors and their respective credits and the causes of pre-emption;

- list of names of those who claim real and personal rights on things in his possession and the indication of the things themselves and the title from which the right arises;

- economic and financial plan that allows its execution;

- report of an independent professional (auditor) that certifies the truthfulness of the data, the feasibility of the plan, the suitability of the agreement itself to ensure the regular payment of the creditors who have remained outside.

 

The approved agreement is not binding for non-adherent creditors who must be paid in full within 120 days.

 

The acts performed in execution of the agreement are exempt from revocatory claim and criminal liability.

 

The effects of the agreement are extended to the partners jointly liables, who if they have provided guarantees continue to respond to this title, unless otherwise agreed.

 

If any substantial changes need to be made to the plan, before or after approval, they require a new certification from the appointed professional, and the creditors' consent expressions must also be renewed, and they can file an objection within 30 days.

 

The application for debt restructuring and the agreements with creditors must be filed with the business register and become effective from that moment, so creditors and interested third parties have 30 days to file an objection.

 

After this period, the Court sets the hearing for the parties to appear in chambers, decides on any objections filed and issues a ruling on approval; the Court may appoint a judicial commissioner.

 

The sentence of approval of the debt restructuring agreement application is published in the business register.

 

If:

 

- the Court does not approve the agreement and if

- a creditor or legitimate third party has filed an appeal, having ascertained the debtor's insolvency,

 

the Court declares the opening of judicial liquidation.

 

 

B1) Facilitated restructuring agreement and B2) extended-effective debt restructuring agreement (B1 Accordo di ristrutturazione agevolato e B2 Accordo di ristrutturazione dei debiti a efficacia estesa)

 

To encourage the use of the debt restructuring agreement, the CCII has introduced two variants of the institution:

 

- B1 the Facilitated Restructuring Agreement;

- B2 the Extended-effective Debt Restructuring Agreement.

 

The facilitated restructuring agreement is stipulated with creditors representing at least 30% of the credits, it can be presented only when the debtor does not propose a moratorium for creditors outside the agreements and waives the right to request measures to protect the assets.

 

The extended-effective restructuring agreement allows the extension of the effects of the agreement, under certain conditions, also to non-adhering creditors, such extension of the effects of the agreement can only concern creditors belonging to the same category, for this to happen it is necessary that:

 

- all creditors of the same category have received adequate information on the debtor's situation;

- the agreement provides for the continuation of the business activity and the payment of creditors to a significant or prevalent extent through the proceeds of business continuity;

- the adhering creditors represent 75% of the creditors belonging to the own creditors category;

- those other creditors of the same category who are not adhering to the agreement, to whom the effects of the agreement are extended, can be satisfied in a measure no less than judicial liquidation;

- the debtor has notified the agreement, the request for approval and the attached documents to all creditors.

 

 

Extended-effective Debt Restructuring Agreement with banks and financial intermediaries (Accordo ad efficacia estesa con banche ed intermediari finanziari)

 

This agreement exists when the debtor has an indebtedness towards banks and financial intermediaries in an amount not less than 50% of the total indebtedness and requires the extension of the agreement also to non-adhering creditors belonging to the same category (banks and financial intermediaries).

 

In order for the effects of this agreement to be extended to non-members, the same conditions as those set out for agreements with extended effectiveness apply, however it is not necessary for the agreement to provide for business continuity.