Judicial proceedings and out-of-court arrangements - The Italian framework

The aim of this chapter is to give a comprehensive overview of the present day Italian Insolvency Law framework, and its evolution after the introduction of the new Business Distress and Insolvency Code in September 2021, broadly reforms the current law. It is addressed to foreign scholars, practitioners and managers, who wish to be acquainted with the Italian legal framework to prevent and manage a corporate crisis. The first part of the chapter is dedicated to the Italian Insolvency Law, showing its evolution from the 1940s to the present day with the introduction of the Business Distress and Insolvency Code. The goal is to allow the reader to understand how the players involved in the management of the crisis (directors, Courts, creditors, advisors, etc.) must act, and the rationale behind each procedure. Moreover, a classification of the procedures is provided, to differentiate between judicial proceedings and out-of-court arrangements. The second and the third part take a deeper look at judicial proceedings and out-of-court arrangements, describing when they are used, which parties are involved, and which steps must be taken to achieve the restructuring. Furthermore, a brief analysis of the differences introduced by the Business Distress and Insolvency Code is presented. The last part is dedicated to the “early-warning” procedure introduced by the Business Distress and Insolvency Code, which illustrates what a firms, directors and supervisors are supposed to do in order to prevent the crisis and manage its very early stages.