Debt restructuring agreements in Italy. An empirical analysis of filing under article 182 bis of Italian Bankruptcy Law.

In 2013 the financial crises affecting many European Countries have led in Italy around 3.000 companies to file for preventive arrangements and debt restructuring agreements. An empirical analysis on filing under 182 bis of Italian Bankruptcy Law which occurred in two relevant Courts of Northern Italy, Milan and Monza, between 2009 and 2013 shows that d istressed companies with a higher probability of getting their plan approved and succeed in their workouts are, on average, structured ones with large debt exposures and with a significant number of banks involved in the restructuring process. Especially for larger exposure, banks are willing to provide new finance and to forgo the ir credit in terms of write offs and deferral of instalments. From the borrower’s standpoint, debt restructurings are accompanied, in the most successful cases, by changes of internal organization, reduction of costs and focus on core business, although, on average, borrowers exit restructurings with increased leverage.