ITALY Trends and Developments Contributed by: Cristian Fischetti, LEXIA
the protective ones, thereby extending judicial protec - tion beyond term. The permissible content of precautionary measures significantly differs from that of protective meas - ures. While protective measures are limited to those expressly provided for under Article 18 CCII, precau - tionary measures may vary according to the specific needs of the company. For instance, the debtor may requestas a precautionary measure judicial confirma - tion of the conditions necessary to obtain social secu - rity or tax compliance certificates (so-called DURC and DURF), or measures such as the suspension of the enforcement of state guarantees and pledges, or the inhibition of bank account freezes by certain credi - tor institutions. In any case, precautionary measures may only have a non facere content, ie, they may impose prohibitions or suspensions but cannot compel the performance of positive obligations. 8. Other operations requiring judicial intervention Given that the CNC is an out-of-court proceeding, the circumstances in which the court may intervene are limited. As already explained, a first example of judicial activity is the request for protective measures, while another is the authorisations that the debtor may request to the court pursuant to Article 22 CCII: at the debtor’s request, the court, having verified the func - tionality of the acts with respect to business continuity and the best satisfaction of creditors, may authorise the debtor to enter into super-senior financings, or to transfer the business or its branches without the obligation to assume past debts. If, in order to preserve business continuity during the CNC, a third party, a shareholder or even a company within the same group provides new financing to the debtor, such financing may qualify prededucibile , ie, with priority repayment under the CCII in the event of subsequent insolvency proceedings. The reason behind this rule is to encourage the injec - tion of new resources into distressed companies, thereby supporting the continuity of operations and the success of the turnaround. The possibility of pri - ority also for the shareholder is in the interest of the
restructuring according to the CCII. Consequently, both external lenders and shareholders are more like - ly to contribute new financing when they know their claims will enjoy preferential treatment in the event of a future insolvency process. Another possible form of judicial intervention within the CNC concerns the transfer of the business or one of its branches. As already noted, the purpose of the CNC is to promote the recovery of the debtor, even indirectly, for instance through its sale to a third party willing to ensure business continuity. In such cases, potential purchasers are naturally more inclined to proceed if they can be released from the burden of the debtor’s pre-existing liabilities. To this end, the court may authorise the transfer of the business without the purchaser assuming the seller’s previous debts, in derogation of Article 2560, Paragraph 2, of the Ital - ian Civil Code, except for those arising from employ - ment relationships, which are to be jointly satisfied. In granting such authorisation, the court may consult the Expert on the process by which the purchaser was identified, the fairness of the agreed price, and any other relevant circumstance, while the Expert shall in turn inform the court if the purchaser qualifies as a related party of the debtor. In this way, the legislation seeks to reconcile the need to preserve the company’s value and operational continuity with the protection of creditors, ensuring that the transfer serves the broader goal of an efficient restructuring, through the indirect continuity of the business. 9. Possible outcome of the negotiations The negotiated settlement procedure operates as a flexible framework that enables the debtor to enter - tain structured discussions with creditors within a protected environment, without the interference of external commissioners or supervisory bodies, other than the appointed Expert. Its function is to provide a legally safeguarded environment in which the parties can explore viable solutions to the company’s finan - cial distress, often paving the way for the subsequent adoption of more traditional restructuring instruments. In the event of a successful negotiation pursuant to Article 23 CCII, the outcome may consist of the con - clusion of (a) a contract with one or more creditors, with the tax benefits outlined in Article 25- bis , Para-
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