Massimiliano Albanese



The recent enactment of the Decree Law 8 April 2020 no. 23, the so-called "Decreto Liquidità", strongly breaks into the framework - indeed already quite complex - of the multiform emergency legislation related to the Covid19 pandemic.

Approved by the Italian Council of Ministers last April 6th, in order to stem an increasingly likely collapse of the Italian economy, the new Decree, with its 44 articles divided into 6 chapters, contains much more incisive interventions than those initially provided for by the Decree Law 17 March 2020 no. 18, the so-called "Cura Italia", which is in some ways a completion.

The central focus of the measure, as amply highlighted also by the Government's institutional communication, is linked to the issue of liquidity for businesses, to which 400 billion euros are allocated (divided between internal market and exports), with the adoption of measures for facilitated access to bank credit by means of the State guarantee. Another aspect that has been highlighted is the forecast of a strengthening of the public powers attributable to the so-called "golden power", in matters of protection of the strategic sectors of the national economy, above all, in order to limit possible external speculative aggression.

The Decree also contains several other interventions - of lesser media impact but no less important in legal and economic terms - in tax, procedural, health and labour matters, as well as business continuity.

The purpose of this brief contribution is, properly, to illustrate these latter interventions, which concern in particular issues of company law and the business crisis, contained in a few articles, all at the second head of this new Decree. An examination from which are deliberately excluded those rules, contained in the same second chapter, which instead return to talk about liquidity for companies or dwell on the maturities of bills of exchange and cheques.

It is a series of innovations that - out of controversy, it must be said immediately - present some risks and underlie some "de facto decriminalisations" carried out, perhaps deliberately, a bit on the quiet. But which, in the final analysis, are full of interesting opportunities for companies: to seize them, as always, one can only recommend the recourse to the indispensable strategic consultancy of professionals expert in the complex subject matter, in order to avoid errors and abuses and to draw concrete benefit from regulatory innovations.

Innovations which, in the perspective followed by the emergency legislator, should preserve the continuity of businesses, thus avoiding the occurrence of a high number of bankruptcies. Therefore, it is precisely on the subject of bankruptcy that this examination is worth starting.


Fail again, fail better.


Article 5 of the Decree postpones to 1 September 2021 the entry into force of the new "Codice della Crisi d'Imprea e dell'Insolvenza" (the Italian Business Crisis and Insolvency Code), related to the Legislative Decree 12 January 2019 no. 14, originally scheduled for 15 August 2020.

The Code in question was introduced with the aim of implementing a complete reorganisation of the rules governing insolvency procedures, essentially due to a logic of greater protection of the company's assets: the company's delay, in catching the signs of crisis, should not end up justifying an irreversible worsening of the balance sheet, leading to a de facto impossibility to satisfy creditors.

From this point of view, the company's responsibilities for entrepreneurs and administrators had also been strengthened, resulting in significant amendments to articles 2086, 2476 and 2477 of the Italian Civil Code, on which we refer to the in-depth analysis contained in the article New responsibilities for entrepreneurs and company administrators: how the new "code of business crisis and insolvency" will change the world of italian s.r.l. (limited liability company), published on the website of the Studio AMP by our colleague Francesca Rizzuto (to whom, moreover, a sincere thanks must be addressed for having collaborated in the drafting of this comment).

While some minor parts of the Code have already been implemented before the health emergency, the rules with the greatest impact, which were expected to come into force by the summer of 2020, refer precisely to the indicators of the business crisis, which should help to catch the signs of weakness in due time: these indicators have, properly, the task of promptly intercepting the state of crisis, through a reporting system, to allow to take action before this situation turns into irreversible insolvency, in order to safeguard business continuity.

If they were applied today - in the middle of a health crisis, but above all an economic crisis of rare gravity, which has seen the majority of companies forced to suspend their activities - the crisis indicators in question could not play the specific selective role they are intended to play: on the contrary, their application would generate potentially harmful effects, since the crisis that companies are going through cannot reasonably be attributed, at this moment, to imprudent or incorrect business management, but it must certainly be linked to mere inactivity, imposed by the various "D.P.C.M." on lockdown and, more generally, to the serious global economic recession that the emergency itself is causing, with a contraction, estimated by the International Monetary Fund, equal for Italy to 9,1% of the national P.I.L. (the index of the gross domestic production value).

This context situation, however, would have distorted any test on the real effectiveness of the new crisis management institutions, determining the failure of the important reform of this matter and sparking controversy on the advisability of further legislative intervention. Instead, the postponement will probably allow the legislator to fully and better incorporate in the reform also the additional principles of the preventive restructuring framework contained in the new EU Directive 20 June 2019 no. 1023/2019, precisely on the subject of restructuring and insolvency.

Therefore, it can be considered that the wise decision of the Government, to postpone the entry into force of the new Code of Business Crisis and Insolvency until September next year, contributes in substance to ensuring greater legal certainty in bankruptcy matters. In fact, even in the emergency context, the application of the "dear old" Royal Decree 16 March 1942 no. 267, better known as the Bankruptcy Law, will continue, albeit with greater "elasticity" (as will be better explained later). These are, in this case, rules of well-established interpretation and application, whose persistent cogency avoids generating possible panic among economic operators and widespread doubts among jurists, as would certainly have happened, if new and revolutionary provisions had been applied in the emergency context, in a particularly delicate and highly technical legal-economic field, such as the business crisis.

Moreover, as mentioned above, the Decreto Liquidità not only confirms the previous regulatory framework of bankruptcy law but also introduces significant benefits for companies in crisis exposed to bankruptcy proceedings.

In particular, art. 10 of the Decree blocks until the end of June 2020 all new bankruptcies and other proceedings based on the state of insolvency, providing that applications for bankruptcy (art. 15 of the Italian Bankruptcy Law), compulsory administrative liquidation (art. 195 of the Italian Bankruptcy Law), as well as extraordinary administration of large companies (art. 3 of Legislative Decree 8 July 1999 no. 270), filed with the court in the period between March 9th, 2020 and June 30th, 2020, cannot be processed.

The block in question concerns all the business crises connected to the insolvency, regardless of any evaluation on the actual traceable of the same to the health emergency by Covid-19, which would result in a very complex and, in fact, impossible to ascertain in a short time for the Judicial Authority.

Moreover, the provision concerns practically all companies, both micro, small and medium and large, with the exception of the very large ones (i.e. those with at least 1000 employees and at least 1 billion Euros in liabilities), whose industrial restructuring procedure, provided for by Decree Law 23 December 2003 no. 347 (converted in Law 39/2004), is not mentioned among the blocked procedures.

The express reference, on the Decree, in art. 15 of the Italian Bankruptcy Law extends to any category of claimant the inadmissibility of the application: whether a creditor, the public prosecutor (but with one exception, as will be said) or the entrepreneur himself. And this makes it possible to glimpse in art. 10 under examination one of the "de facto decriminalisations" that the Decreto Liquidità seems to contain, in matters of so-called "simple bankruptcy".

The general impossibility to file for bankruptcy should, in fact, fails the specific criminal liability provided for in article 217 of the Bankruptcy Law, the first paragraph of which, in point no. 4), punishes - with imprisonment from six months to two years, if declared bankrupt - the entrepreneur who "has aggravated his own bankruptcy, refraining from requesting the declaration of his bankruptcy" (it should be specified, for completeness, that the incriminating law in question also provides for a further case, not touched by the Decreto Liquidità, referring to the hypothesis of "other serious fault" of the entrepreneur in the worsening of the crisis, other than the failure to request his own bankruptcy).

In other words, the entrepreneur is allowed - until 30 June 2020 - to attempt other measures than insolvency measures to remedy his own bankruptcy, on the assumption that the economic crisis generated by the health emergency is having a decisive impact on the configurability of the state of insolvency in the technical sense, defined by art. 5 of the Italian Bankruptcy Law as the manifestation of "defaults or other external events, which demonstrate that the debtor is no longer able to meet his obligations regularly".

It seems to hear the bitter words of the Irish playwright Samuel Beckett, in his latest novel "Worstward Ho!": "You will always try, you will always fail. Never mind, try again. Fail again, fail better."

In fact, the rule in question contains an enormous opportunity for the continuity of business activities but at the same time, a significant risk of substantial impoverishment of future bankruptcy masses, in creditor’s damage.

The practice in fact leads the legal practitioner to imagine that there will not lack - unfortunately - drowning economic operators in a state of effective crisis who, taking advantage of this legitimate "loophole" to bankruptcy, will try to "secure" at least part of their assets, formally stripping themselves of their ownership, probably resorting to more or less sophisticated simulations of onerous acts, in spite of the principle of par condicio creditorum. This trusting, of course, in the de facto inability of the judicial system - overwhelmed by a complex resumption of activities, after months of postponements determined by the emergency - to reach the subsequent declaration of bankruptcy, within the limited term of one year from the acts in question, provided by Article 67 of the Italian Bankruptcy Law for their revocation.

It is true that the so-called criminal case of "fraudulent bankruptcy for distraction", referred to in art. 216 of the Italian Bankruptcy Law, first paragraph, point no. 1), should considerably limit - in consideration of the severity of the penalties provided for, up to ten years of imprisonment - the recourse of the failed entrepreneur to such unfair practices, which would represent, also at the civil level, - ça va sans dire - a real "abuse of right" in relation to the facilitator provision contained in the Decreto Liquidità. However, the concrete punishability of such conduct will have to be compared to the level of sophistication of the acts implemented and will in any case require a rigorous assessment of the intent, according to the canons set forth in article 533 of the Italian Code of penal procedure, which allows the conviction only "if the defendant is guilty of the crime complained of beyond any reasonable doubt". Therefore, it cannot realistically exclude the occurrence of attempts at distraction, to a certain extent encouraged by the blocking of bankruptcies.

Nor this risk appear to be sufficiently mitigated by the provision of the third paragraph of the same article 10 of the Decreto Liquidità, which states that, in the event of subsequent bankruptcy, the period of freezing the prosecution of applications is not counted, inter alia, for the purposes of forfeiture under article 69-bis of the Italian Bankruptcy Law for the promotion of actions for revocation: in fact, one thing is to propose the application in the abstract, another things - and quite different – are the conditions for its admissibility on the merits, in this case strictly related to the ruling, within the peremptory term of one year from the completion of the onerous act detrimental to creditors, of the declaratory judgment of bankruptcy.

Therefore, only careful supervision, in primis by creditors and consequently by the Public Prosecutor, will be able to mitigate such a risk: it is no coincidence that the second paragraph of article 10 of the Decreto Liquidità does not preclude the application for bankruptcy filed by the Public Prosecutor, provided that the application is also accompanied by a request for measures pursuant to article 15 of the Italian Bankruptcy Law, eighth paragraph, i.e. specific precautionary or conservative measures to protect assets and the company, aimed primarily at avoiding conduct aimed at dissipating assets.

Moving on to the rapid examination of another provision of the Decreto Liquidità, always on the subject of bankruptcy proceedings, art. 9 deals with prior agreements and restructuring agreements under the third title of the Italian Bankruptcy Law.

The rationale for this intervention seems to be found in the circumstance that, in the current emergency context, procedures of this nature, which, before the crisis, presented concrete possibilities of success, would today, in the vast majority of cases, be irremediably compromised, with serious repercussions on the effective prospect of business continuity and dramatic effects also in terms of employment.

Briefly, Article 9 provides:

  • for all prior agreements and restructuring agreements already approved, expiring between February 23rd, 2020 and December 31st, 2021, a general extension of six months for the related obligations;
  • for the same procedures, which are pending on February 23rd, 2020 but not yet approved, the option of a period not exceeding ninety days to draw up a new (and obviously different) proposal, as well as the (alternative) option of obtaining a deferment of up to six months of the implementation deadlines, filing the documentation justifying this request for amendment;
  • for "white" agreements - rectius, with reservation (art. 161 of the Italian Bankruptcy Law, paragraph six) - and for restructuring agreements, a further extension, up to ninety days, of the deadline for the submission of the certified plan and the documentation envisaged, even if previously extended and even if a bankruptcy petition is pending: the petition for the granting of this extension must contain a clear reference to the effects deriving from the ongoing health emergency and offer concrete and justified reasons for the assessment of the court, which will decide only after having obtained the opinion of the judicial commissioner.

This, therefore, is the extraordinary framework that articles 5, 9 and 10 of the Decreto Liquidità delineate in the matter of the business crisis, de facto immobilising any insolvency initiative until June 30th, 2020, unless there are further possible extensions in time of the effectiveness of these rules, when the decree is converted into law or through the issue of new emergency measures.

In any case, these measures are destined to run out over time, with a gradual reabsorption of their effects in the normal course of business crisis management dynamics.

On the other hand, the effect on the Italian entrepreneurial fabric of the further rules dictated on company balance sheets and share capital could be much more lasting.


If the capital is infected.


A very interesting provision, in the context of company law, appears to be article 6 of the new Decreto Liquidità, which provides - until December, 31st, 2020 and only for the cases that occurred during the financial years closed by that date - for the suspension of the effectiveness of certain relevant provisions of the Italian Civil Code, regarding the reduction of share capital due to losses.

It is well known that the share capital of a company, both in its nominalistic component (as such, it tends to be fixed and, therefore, suitable to serve as a parameter also for the representation of the ownership structure of the company) and in the real one (linked to the use of its monetary value for the capitalization of the company), has a multiplicity of functions, as widely discussed in doctrine and jurisprudence: guarantee for third parties, tool for the start-up and effective exercise of the company, protection for the continuity and non-disintegration of the corporate structure, etc., etc..

The legislator felt the need to set a minimum threshold below which capital can never fall, otherwise the legal form chosen by subscribers will no longer exist: in particular, article 2327 of the Italian Civil Code sets the minimum capital of joint stock companies at € 50.000, while article 2463 of the Italian Civil Code sets the threshold below which it is not possible to have an ordinary limited liability company at € 10.000 (the simplified form is different).

It can be said, therefore, that the share capital constitutes the main identity matrix of the company and, in a certain way, its very soul. It is no coincidence that the current corporate system provides that, where reductions in share capital are caused by operating losses, measures must be promptly taken to restore the capital itself.

The second paragraph of article 2446 of the Italian Civil Code, relating to joint-stock companies, states that, in the event of capital reductions of more than one third as a result of losses, if such losses are not absorbed within the following year, the shareholders' meeting, or the supervisory board, when approving the subsequent financial statements, shall provide for the related capital reduction; failing this, the court shall issue a decree. The third paragraph of the same article also states that, if the company has issued shares with no par value, the reduction in capital is resolved directly by the board of directors.

At the same time, in the case of limited liability companies, article 2482-bis of the Italian Civil Code provides, in paragraphs four, five and six, that, in the event of a reduction of more than one third of the share capital due to losses, the shareholders' meeting, when approving the financial statements, shall resolve on the related capital reduction: failing this, the directors must appeal to the court, which shall make the necessary reduction by decree.

In the different - and more serious case - in which the losses cause the capital to fall below the legal limit, article 2447 of the Italian Civil Code will apply (for jsc) and article 2482-ter of the Italian Civil Code (for Ltd) provide that the Partners Meeting must resolve to reduce and restore the share capital at the same time, i.e. the legal transformation of the company into a form corresponding to the residual share capital.

If the capital reduced below the legal limits is not reinstated, article 2484 of the Italian Civil Code, first paragraph, number 4), provides for the dissolution of the company (this provision is also replicated with regard to cooperatives by article 2545-duodecies of the Italian Civil Code).

Well, art. 6 of the Decreto Liquidità is intended to give a clean sweep to all these rules, at least as far as for the exercise of 2020 is concerned: therefore, the "infected" capital will not have to be restored because the losses caused by the Covid19 emergency will not be considered for the purposes of the assets of the companies that suffer them.

In this situation, it is clear - although not expressly provided for by the Decree - that the administrators will not incur into the responsibilities referred to in article 2485 of the Italian Civil Code, for failure to ascertain the cause for the dissolution of the company that has suffered the reduction of its capital below the legal limits. Moreover, even in the presence of such reduction, the administrators will retain the fullness of their powers, in derogation of the provisions of article 2486 of the Italian Civil Code (which in normal circumstances would limit them "for the sole purpose of preserving the integrity and value of the company's assets"), since they will not have to nominate liquidators.

However, the administrators are still required to provide relevant information, as provided for the jsc by the first paragraph of article 2446 of the Italian Civil Code and, for Ltd, by the first, second and third paragraphs of article 2482-bis of the Italian Civil Code, regulations which are not referred to in the Decreto Liquidità and which must therefore be considered fully operational: therefore, shareholders or partners must be summoned without delay to the shareholders' meeting and receive a detailed report from the administrative body, on the causes of the losses found, with any observations of the auditing body.

Nevertheless, it seems that the logic underlying the new Code of Business Crisis and Insolvency has been totally disavowed: even in the presence of an evident and objective prognostic index of the crisis, such as the reduction of the share capital, any related responsibility, in the hands of the company's management body, is no longer applicable, while the company's own capital holding company is exempted from the obligation to restore it.

On the other hand, the legislator of the emergency has also provided in other provisions of the Decreto Liquidità an "all-out" protection of business continuity.


Financial statements like bikinis.


Article 7 of the Decree in question lays down provisions on the preparation of the financial statements for the exercise of the current year as at December 31st, 2020. The second paragraph of that article extends the provisions also to financial statements closed by February 23rd, 2020 but not yet approved at the date of entry into force of the Decree itself.

In particular, it envisages that "the valuation of items on a going concern perspective", which is ordinarily provided for by article 2423-bis of the Italian Civil Code, first paragraph, no. 1), may be carried out even if, in fact, the continuity in question is far from being taken for granted, on the sole condition that such valuation is "existing in the last financial statements for the year ended before February 23rd, 2020", even if approved in accordance with the provision set out in article 106 of the "Decreto Cura Italia", which had already generally extended the deadline for approval of the financial statements to 180 days from the end of the financial year, as an exception to the provisions of articles 2364, second paragraph, and 2478-bis of the Italian Civil Code. (120 days).

In view of this provision, which is certainly favourable for companies in crisis, it should be noted that the Decree has not, however, intervened in any way in relation to article 2423 of the Italian Civil Code, the second paragraph of which states that the financial statements "must be drawn up clearly and must represent truthfully and correctly the financial position of the company and the economic result of the exercise".

The truthfulness of the representation is a key principle in the preparation of financial statements and its importance is such that, according to the third paragraph of the same article 2423, "if the information required by specific legal provisions is not sufficient to give a true and fair view, the additional information necessary for the purpose must be provided": therefore, not only the legal criteria must be met but these criteria, where not sufficient, must even be supplemented, where necessary to ensure a true and fair view. The same purpose led the legislator to provide, in the fifth paragraph, even the opposite hypothesis: “if, in exceptional cases, the application of a provision [...] is incompatible with true and fair presentation, the provision must not be applied”.

From this point of view, the concept of "true and fair representation" of the economic and financial situation of the company corresponds, at the end, to the degree of reliability of the representation itself, which is required as high as possible. This degree can be measured in the same way as the drafting principles, which are contained in the Italian Civil Code itself and supplemented by the so-called IAS (International Accounting Standards).

Well, the principle of measuring balance sheet items on a going concern basis is formulated by IAS 1 no. 23 as "assessment of the entity's ability to continue as a going concern", and this implies that "the financial statements must be prepared on a going concern basis unless management intends to liquidate the entity or discontinue the activity, or has not realistic alternatives to do so". Realistic, concrete alternatives, i.e. supported by some effective probability of realization.

It is legitimate to ask oneself, in the climate of general economic uncertainty caused by the pandemic emergency, with the connected forecasts of global recession - indeed apocalyptic, as we said at the beginning - which are circulating, what could be, in many cases, the "realistic alternatives" to liquidation, especially for the less financially structured companies.

This also in the light of the provisions of IAS 1 No. 24, which sets the time horizon for the assessment of the company's ability to "continue to operate as a going concern" at only twelve months, identifying the actual presence of sufficient financial resources as the fundamental parameter of this assessment.

Article 7 of the Decreto Liquidità therefore puts companies in a position to carry out a real forcing, allowing them to use what is ultimately a mere "accounting artifice" that circumvents the criteria for determining the so-called "going concern value" of an effectively functioning company.

In the 1958 Parkinson's Law essay, the British historian Cyril Northcote Parkinson stated with great irony an absolute truth: "financial statements are like bikinis, the most interesting parts remain hidden"!

For the case of effective recourse to the described "accounting artifice" - the use of which, it should be noted, remains entirely lawful - the same article 7 provides that a certain amount of transparency is guaranteed: in fact, it is established that the adoption of the valuation criterion in the perspective of (fake) continuity is "specifically illustrated in the notes to the financial statements, also by referring to the results of the previous financial statements".

Also in this case, however, the Decree did not intervene in relation to a potentially frictional provision with this last provision: in fact, article 2428 of the Italian Civil Code provides, in paragraph one, that in the report on operations, the administrators must indicate, among other things, "the main risks and uncertainties to which the company is subject", with the obvious aim of making clear the prospective sustainability of the financial situation and, therefore, of the effective ability to continue as a going concern. In short, in the same notes a going concern should be supported, which should in fact be denied or, in any case, strongly questioned in light of the risks and uncertainties to which the company is subject, to which the obligation to report remains.

Nevertheless, there is more.

There is, in fact, a further potential problem inherent in the provision of article 7 of the Decreto Liquidità, which is highlighted when comparing this provision with article 2621 of the Italian Civil Code on the so-called "false financial statements".

In fact, the criminal law referred to lastly punishes "administrators, general managers, managers responsible for preparing corporate accounting documents, statutory auditors and liquidators, who, in order to obtain an unfair profit for themselves or others, in financial statements, reports or other corporate communications to shareholders or the public, provided for by law, knowingly expose material facts that are not true or omit material facts whose disclosure is required by law on the economic, equity or financial situation of the company or group to which it belongs, in a way that is concretely liable to mislead others". The penalty envisaged for this case is imprisonment from one to five years.

Well, since the novel of 2015 has expressly decriminalised false corporate communications relating to valuation elements, one could hastily conclude that the issue of criminal liability, referred to in the aforementioned art. 2621 of the Civil Code on the so-called "false financial statements", is completely irrelevant with respect to the choice to use the valuation artifice referred to in art. 7 of the Decreto Liquidità.

However, the United Criminal Sections of the Supreme Court of Cassation established in sentence no. 22474 of May 27th, 2016 that "the crime of false corporate communications, provided for by article 2621 of the Italian Civil Code, as amended by Law 27 May 2015 no. 69, may be committed in relation to the presentation of evaluation statements in the financial statements if the agent, in the presence of evaluation criteria established by law or generally accepted technical criteria, knowingly departs from them and without providing adequate supporting information, in a concrete way that is likely to mislead the recipients of the communications".

In other words, according to the most authoritative - and to date unchanged - guideline of the nomophilactic jurisprudence, the evaluation falsehoods continue to fully fall within the scope of operation of the reformed article 2621 of the Italian Civil Code and, in particular, they occur precisely when the financial statements contain evaluations that, consciously departing from the accounting principles, are concretely likely to mislead the recipients of corporate communications.

The justifying that the United Sections make up for this case is "adequate supporting information", which appears to be in line with the provisions of the last part of article 7, paragraph 1, of the Decreto Liquidità, which refers to the information to be included in the information note.

But, if this is the case, a further "de facto decriminalisation" inherent in the Decreto Liquidità seems to be glimpsed: the legislator of the emergency has in fact proceeded to definitively overcome the aforementioned jurisprudential orientation, excluding in matters of so-called "false financial statements" the punishability of valuations on the going concern basis which, violating the principles of truth and accounting correctness of the financial statements, would have been potentially punishable by the criminal judge (*).


Another profile worth mentioning is the impact that the hypothesis of "de facto decriminalization" here put can also have on the compliance matter, according to the Legislative Decree 8 June 2001 n. 231 on the regulation of administrative liability for the crime of legal persons. In fact, according to the provisions of art. 25-ter, first paragraph, letter a) of the just mentioned legislative text, the crime of false corporate communications pursuant to art. 2621 of the Italian Civile Code constitutes a predicate offense for the application of administrative sanctions, in the case of a number of "quotas" from 200 to 400 (according to the calculation mechanism provided for by art. 10 of the same Legislative Decree 231/2001, these "quotas" corresponds to a financial penalty ranging from a minimum edict of € 51,600 up to a maximum of € 619,600).

However, while it appears easier to exclude the punishment of the offender for the false valuation tolerated and, therefore, tacitly discriminated by the "Decreto Liquidità" – also making use of the provisions of art. 51 of the Italian Criminal Code, first paragraph, according to which "the exercise of a right or the fulfillment of a duty imposed by a legal norm [...] excludes punishment" – the exclusion of administrative liability according to the abovementioned L.D. 231/2001 could be much less easy, where it is considered that art. 8 of the latter, in the first paragraph, letter b), expressly states that the liability of the legal person continues to exist even if the predicate offense is extinguished for a cause other than an amnesty.

So, in the face of the opportunity that the Government wanted to give to companies, to draw up the 2020 budget in any case as a sign of a doubtful continuity, we could find ourselves faced with an incurable and dangerous error of non-connection between rules, which only the Legislator could resolve upon conversion in Law of the "Decreto Liquidità".


Carpe diem, dear partners!


A further interesting opportunity for companies in crisis (and its partners) is offered by art. 8 of the Decreto Liquidità: the provision, in fact, excludes the application of the principle of subordination of partners loans in favour of companies, made from its entry into force until December 31st, 2020, establishing that in relation to such transactions articles 2467 and 2497-quinquies of the Italian Civil Code will not apply.

The provision evidently aims to stimulate the influx of resources useful for the survival of the company, encouraging the company structure to become more directly involved, in order to deal with the emergency, with the promise to disapply the principle of subordination.

The latter, under normal conditions, would have the opposite purpose of discouraging undercapitalization, a phenomenon typical of the Italian entrepreneurial fabric, often implemented precisely through manoeuvres that allow a contribution (by the partners) of the necessary resources (to the companies) only on a temporary basis, through repayable loans (even if subordinated), instead of definitively, i.e. in the form of risk capital, with the consequent non-payment of the relative credit during the company's life (but only where there is a residual asset in the liquidation balance sheet). However, we are now in a state of emergency, so it seems necessary facere de necessitate virtutem, as suggested by San Girolamo.

According to article 2467 of the Italian Civil Code, second paragraph, "partners loans in favour of the company are those, in any form whatsoever, which were granted at a time when, also in consideration of the type of activity carried out by the company, there is an excessive imbalance of debt with respect to shareholders' equity or in a financial situation of the company in which a contribution would have been reasonable".

This rule is dictated for limited liability companies, but both doctrine and majority jurisprudence agree that the regulation of financing - and above all of its subordination, on which it will be said immediately - should also apply to JSC, as an expression of a general principle of Italian company law.

The Resolution of the Interministerial Committee for Credit and Savings of March 3rd, 1994 (implementing art. 11 of  Legislative Decree 1September 1993 no. 385 regarding the collection of savings from the public) indicates, at its first section, the conditions in which a partner must find himself in order to be able to provide financing to the company, which are three and must coexist: formal registration in the shareholders' register for a period of time not less than three months, ownership of a shareholding not less than 2% of the share capital deliberated and the presence, in the company's by-laws, of an express provision for the possibility of financing by partners.

However, art. 8 of the Decreto Liquidità establishes the suspension of effectiveness of the regulatory provision referred to in the first paragraph of the aforementioned art. 2467 of the Italian Civil Code, according to which "the repayment of shareholders' loans in favour of the company is subordinated to the satisfaction of other creditors and, if it occurred in the year preceding the company's declaration of bankruptcy, must be returned". 

It also establishes the suspension of the effectiveness of article 2497-quinquies of the Italian Civil Code, which would extend the above rules also to loans made in favour of the company by those who exercise management and coordination activities towards the company, as well as by persons subject to it.

The issue once again appears to be a vehicle for possible interpretative disputes, when is taken into account the criminal case law on the lack of deferment of the funding in question.

In fact, in the wake of a very consolidated orientation, the recent ruling of the Fifth Criminal Section of the Supreme Court of Cassation no. 8431 of February 1st, 2019 has definitively clarified that, in a period of financial instability of the company, the collection of sums from the social security funds, aimed at the repayment of payments made by spartners as financing, integrates the case of the so-called "preferential bankruptcy" referred to in article 216 of the Italian Bankruptcy Law, paragraph three, according to which "a bankrupt who, before or during the bankruptcy proceedings, for the purpose of favouring, to the detriment of creditors, some of them, makes payments or simulates securities of pre-emption shall be punished by imprisonment of from one to five years".

Therefore, given the hypothesis of the repayment, during a subsequent financial year at the end of the current emergency, of a loan disbursed in this year 2020 by a partner, on the assumption of its ordinary repayability without deferment as provided for by the Decreto Liquidità, it is legitimate to wonder what the consideration of such a transaction could be if, for future causes other than the crisis related to the Covid19 emergency, the company should end up in such disruption as to lead to its bankruptcy.

Will it be possible, in that future case, to consider legitimate the substantial violation of the principle of par condicio creditorum, inherent in the disapplication of the principle of subordination of financing by shareholders?

It is not easy to answer this question, if we do not resort again to the well-founded intuition that we are in the presence of yet another "de facto decriminalization". Which can only sound, for the members of the undercapitalized Italian companies, as an invitation to take advantage of the unique opportunity: quoting the Latin poet Orazio, carpe diem, quam minimum credula postero!.


To posterity the hard sentence.


In conclusion, it is necessary to recall the ancient Latin adage solum tempus narrabo.

The measures to protect business continuity contained in the Decreto Liquidità - as well as those properly aimed at introducing money into the production system, through the banking system - will certainly have an immediate and considerable impact on the so-called "real" economy and, put to the test of the facts, their effects could prove to be anything but ephemeral even on a longer perspective: however, borrowing the famous verse of Alessandro Manzoni, one can only leave the difficult sentence to posterity.

What can already be affirmed today without fear of denial, however, is that the continual massing of emergency regulations, sometimes a little borderline like those examined so far, will give rise to increasingly complex questions of interpretation, which the legal and economic experts will be called upon to resolve, in the interests of the companies benefiting from the regulations themselves.

More than ever before, at a time like the present, when the effects that the pandemic will have on business continuity are unusually unpredictable, prudent entrepreneurs will have to trust and rely on capable and far-sighted professionals, qualified but above all with an indispensable flexibility of interpretation.

It is only through them that they will be able to take full advantage of the non-secondary opportunities that, looking with optimism at the "glass half full", even the worst of crises can hide.



Pin It