ITALY Trends and Developments Contributed by: Cristian Fischetti, LEXIA
The Negotiated Business Crisis Settlement (Composizione Negoziata Della Crisi) 1. Introduction Introduced for the first time by Legislative Decree No. 118 of 24 August 2021, the negotiated business crisis settlement ( composizione negoziata della crisi d’impresa , or CNC) has progressively become one of the preferred instruments for both Italian and foreign debtors with their business centre of main interests in Italy for addressing situations of corporate distress. The framework governing the CNC was later incor - porated – albeit with some additions – into the new Italian Insolvency Code ( Codice della crisi d’impresa e dell’insolvenza , or CCII), which entered into force on 15 July 2022, under Articles 12 et seq, implementing EU Directive No. 1023/2019 (the so-called Insolvency Directive). The CNC pathway is designed to encourage early intervention in situations of financial difficulty, allowing the debtor to engage with creditors under the supervi - sion of an independent Expert appointed by the com - petent Chamber of Commerce. The Expert’s role is to facilitate dialogue among stakeholders, promoting agreements that can ensure the company’s recovery or, when necessary, lead to a more orderly restruc - turing process by means of the traditional insolvency tools. The CNC, therefore, represents a significant evolution in the Italian approach to business crisis management, marking an evident shift from a punitive and liquidation-oriented model to one that prioritises early detection of distress, co-operation among par - ties and the preservation of the going concern. 2. The main features of the negotiated settlement of crisis pathway Unlike other tools offered by the CCII, the CNC is pri - marily aimed at fostering business continuity – even indirectly – and is characterised by its extrajudicial nature. Judicial intervention is envisaged only upon request by the debtor pursuant to Articles 18 and 19 CCII, for the implementation of protective and precautionary measures, or under Article 22 to seek authorisation for super-senior loans ( finanziamenti prededucibili ) or to transfer the business without the effects provided for
in Article 2560, Paragraph 2, of the Italian Civil Code, regarding joint and several liability of the purchaser. Another distinctive feature of the CNC lies in its limited publicity requirements and its inherently negotiated, flexible and confidential character, which together make it particularly attractive. The pathway is entirely voluntary, considering that it is the debtor that decides whether to initiate it or not. The qualified public credi - tors, such as the tax or social security authorities (Arti - cle 25- novies CCII), or the debtor’s controlling bodies, such as the statutory auditors (Article 25- octies CCII), have the duty to report the company’s crisis situation, but it does not create any obligation for the debtor to act. Furthermore, pursuant to Article 21 CCII, the debtor retains full possession and control of the business assets, maintaining both the ordinary and extraordi - nary management powers of the business. Moreover, the pathway does not involve competition between creditors as the debtor is prevented neither from agreeing to the creation of new secured rights nor from making voluntary payments (Article 18, Para - graph 1, CCII); thus, the par condicio creditorum rule (ie, the same conditions for creditors with the same ranking) does not apply. 3. Access to the CNC pathway The CNC is not an insolvency or a pre-insolvency pro - cedure, and it is considered as a pathway ( percorso ) that could be finalised in several ways according to the CCII. It begins with the submission of an application by the debtor to the general secretary of the Chamber of Commerce where the registered office of the debtor is located for the appointment of an Expert,who must be registered in a dedicated registry of specialised professionals. Before submitting the application, the company shall assess whether one condition is fulfilled (negative condition of admissibility) and simultaneously whether two prerequisites exist. Regarding the condition, the application for the appointment of the Expert can - not be submitted when the debtor is subject to other
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