The new code on company crisis

On February 14, 2019, the new code of company crisis and insolvency was published in the Official Gazette (Legislative Decree no. 14/2019).

After numerous regulatory interventions over time, the Italian legislator has finally produced an organic reform of the company crisis aimed at supporting the regeneration of companies. The new Code, in fact, aims to reform in an organic and unitary way the subject of the insolvency procedures and the crisis from over-indebtedness.

In the new text of the law, the term “bankruptcy”, is replaced by “judicial liquidation”: the negative meaning that characterized the bankrupt debtor, who should now be less hesitant to bring out the state of crisis, thus disappears.

From this perspective, the reform introduces new tools: the alert procedures and assisted composition of the crisis before the OCRI (Body of composition of the company crisis). These are instruments designed to immediately bring out the crisis in order to prevent the activation of procedures to regulate the crisis and insolvency, with a view to the company’s restructuring.

In other regards, existing procedures (in particular agreements implementing recovery plans, agreement with creditors, debt restructuring and bankruptcy agreements - rectius judicial liquidation -) are streamlined and adapted to the practice formed under the previous bankruptcy law.

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