Italy: Introduced New Restructuring Tools for Entrepreneurs
  • 2022-04-27
  • Entrepreneurship Research Center on G20 Economies
  • Edit
  • On November 15, 2021, the Italian government introduced a brand-new restructuring tool to help Italian entrepreneurs cope with the critical situation that may turn into bankruptcy at an early stage, and discuss entrepreneurs with other stakeholders with the support of experts who act as “facilitators”. This tool is a new consultative reorganization procedure (composizione negoziata della crisi) stipulated by Decree No.118 of August 24, 2021, and came into effect under Decree No.147 of October 21, 2021 (Decree 118/2021). It should be noted that one of the main objectives pursued by the law is to introduce state tools to achieve effective and early restructuring, so as to avoid bankruptcy and bankruptcy of viable enterprises, and the ultimate goal is to minimize unemployment and losses to creditors. 

    The tool is designed to enable entrepreneurs to negotiate fairly with stakeholders (financial creditors, suppliers, shareholders, etc.), in which the intervention of experts is the key process, and experts are people with specific expertise and participate in the restructuring process in an independent capacity. In addition, the negotiating portfolio allows struggling entrepreneurs to continue to benefit from government support and incentives.

    Entrepreneurs interested in using the tool must submit applications for the appointment of experts on the Companies Registry’s online platform and explain the current and projected economic and financial situation. After that, the economic and financial standing of entrepreneurs is reviewed by appointed experts. If the experts believe that the business looks recoverable, they will start discussions with interested parties to determine the terms and conditions under which an agreement can be reached. If they think that there is no chance of recovery, they will reject the entrepreneur’s application. At the end of their appointment, they will upload the final report. The negotiated reorganization lasts for up to 180 days from the date of appointment of experts, and can be extended for another 180 days when certain specific circumstances occur. Negotiating parties must cooperate with entrepreneurs and experts in a fair, sincere, and timely manner, and keep all matters discussed confidential. In addition, requests and suggestions made during negotiations must be answered in a timely and reasonable manner. Decree No. 118/2021 requires banks and financial intermediaries and their agents to participate in negotiations in an active and informed manner. 

    If an entrepreneur applies for protective measures for all or part of his creditors, creditors whose rights are affected by the protective measures should not unilaterally refuse to perform their obligations under the contracts signed with the entrepreneur, terminate such contracts, predict their expiration dates, or modify contracts in a way that harms the entrepreneur.





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  • National University of Singapore
  • Canada-China Institute For Business & Development
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  • Tsinghua X-Lab

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