Restructuring & Turnaround

A mix of domestic and international clients ensures that this firm is engaged in a steady flow of operations. Sources say: The team is responsive, diligent and works equally well in English and Italian..
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Maintains a strong reputation on the debtor side, but also has expertise in acting for a wide range of other clients, including creditors and government entities, and for organisations post-bankruptcy. Extremely focused on the objective and trying to find a solution that is perfect for our situation
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Nctm has extensive experience in bankruptcy and insolvency law in general, as well as in debt restructuring procedures, distressed investments and the so-called “special opportunities”.

Nctm assists banks, institutional investors, Italian companies and multi-national corporations in all corporate crisis phases and subsequent insolvency proceedings, as well as all tax-related issues and litigation concerning administrative proceedings.

Nctm’s activities in this field include:

  • assistance in the development of turnaround projects
  • identification of the most appropriate tools in the circumstances
  • assistance during the preparation and negotiation of reorganisation plans, debt restructuring agreements, pre-emption and bankruptcy agreements, extraordinary administrative proceedings
  • assistance in the acquisition of companies, assets and credits
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30/03/2017

A ruling of the Court of Padua of 31 December 2016 is compared with few other known Court decisions regarding the extension of the effects of a debt restructuring agreement to dissenting financial creditors

The case
Two companies having an indebtedness mainly towards banks and leasing companies, jointly submitted to the Court a request for confirmation of a debt restructuring agreement providing for a two-year moratorium of payment of principal and a restructuring of interests.

The debtors also requested the Court to cram down a dissenting bank, while certain ad hoc agreements were concluded with other dissenting banks, rescheduling the relevant debt.

The issues
Article 182-septies IBL provides that the effects of a debt restructuring agreement, concluded with other creditors belonging to the same class and representing the 75% of the value of the class, can be extended to dissenting financial creditors if, inter alia, under the terms of the agreement they are paid no less than they would receive according to «feasible alternatives» and the debtor’s indebtedness is mainly towards banks and other financial creditors.

A few issues remain unsettled, including (i) whether there is a need to include all creditors in classes, (ii) what is the test to cram down dissenting creditors, (iii) whether separate agreements can be concluded with some of the dissenting creditors, not being considered as part of the agreement which is subject to Court confirmation and cram down.

The decision of the Court
The Court of Padua confirmed the agreement and crammed down the dissenting bank, considering that it would be paid under the agreement no less than following insolvency liquidation of the real estate assets of the debtors, and that the latter was the alternative to be considered.

In the specific case there was not an issue regarding how the class was formed, given that the creditors concerned were all unsecured and the treatment was the same, although the Court elsewhere in its reasoning mentions that separate agreements were concluded with other dissenting banks.

Commentary
After almost two years from the introduction of Article 182-septies IBL , in June 2015, case law so far highlighted just a few decisions by the Courts:

  1. a decision by the Court of Milan on 16 February 2016; in this case, financial creditors were divided in three classes, but apparently only two of those were relevant for cram down purposes;
  2. a decision by the Court of Forlì on 5 May 2016, ruling that the class including secured creditors was not correctly formed by reason of the fact that only collateral on debtor’s assets was considered, but not personal guarantees by third parties. The Court, nevertheless, confirmed the agreement and crammed down the dissenting bank, reshaping the classes by creating a third one (which was not formed by the debtor), thus being able to conclude that the legal requirements for confirmation were met.

With respect to assessing whether the agreement is convenient for dissenting creditors, both these decisions are in line with that of the Court of Padua, as they deem that the «alternative» to be considered is the bankruptcy liquidation scenario.

As to the need to form classes including all creditors, both decisions show that this was indeed what the debtors had done, although the dissenting banks to be crammed down were included only in some of the classes. In this respect, it should be pointed out there is actually no need to classify all creditors – as it is instead the case in concordato preventivo – pointing out that (i) the law considers a class exclusively in relation to the 75% majority of the creditors belonging to the same class as the bank to be crammed down, and (ii) it is undisputed that the debt restructuring agreement can provide a different treatment for each creditor who has agreed to that. In a case in which our firm was involved, indeed, the Court of Vicenza confirmed an agreement in which classes were limited to banks having the same position and interests as the banks to be crammed down (another feature of the agreement was also the express provision that further banks could enter into the agreement later, before it was confirmed).

The case decided by the Court of Padua highlights that the debtor can conclude ad hoc agreements with some dissenting creditors, but he may choose not to consider these as part of the debt restructuring agreement for the purposes of confirmation. It is uncertain whether these creditors can be deemed as dissenting or parties to the agreement, if one considers that the debtor can certainly conclude a series of separate agreements with creditors and then put them together as a debt restructuring agreement for the purposes of confirmation. There seems to be a limitation to this, only in the event that such a selective approach can alter the conditions required by law for confirmation or cram down purposes.

 

 

The contents of this article is meant for informative purposes only and cannot be considered as professional advice.

For further information please contact Fabio Marelli, fabio.marelli@nctm.it

 

30/03/2017

The Court of Florence (November 2, 2016) confirmed that the debtor can retain part of his assets, with a view to support the company’s recovery and in derogation to principles of liability of the debtor.

The case
A company applied for concordato preventivo, based on a plan providing for, on one side, the sale of those assets not functional to the business and, on the other side, the company to continue to trade retaining those other assets which were needed for the activities to be carried on.
A creditor opposed to confirmation of the concordato proposal, arguing that the creditors were not assigned all of the earnings generated from continued operations.

The issue
In the most common form of concordato preventivo, based on the «assignment of assets to creditors» scheme, the entire estate of the debtor is liquidated for the benefit of the creditors. However, the concordato preventivo scheme providing for the debtor to continue to trade (as considered by art. 186-bis IBL) does not provide for the liquidation of assets, which are retained by the debtor in order to generate the cash flows to be then paid out to the creditors according to the proposal.

The decision of the Court
First of all, the Court of Florence recalled the case law excluding that the debtor can retain part of the assets – with reference to concordato preventivo based on the «assignment of assets to creditors» scheme and in relation to the principle of liability of the debtor set forth in art. 2740 ICC – which noted that the debtor can choose the alternative scheme provided by art. 186-bis IBL, expressly allowing the debtor (who planned to continue to trade) to liquidate some of his assets which are not functional to the plan: therefore, according to this scheme, the debtor is not required to liquidate all of its assets, but it can retain those which are necessary to carry on his business activities.

As to the specific issue, whether all future earnings generated from continued operations, the Court noted that the concordato preventivo scheme providing for the debtor to continue to trade is structurally and functionally different from that based on the «assignment of assets to creditors» and it is an alternative to the liquidation of the entire estate of the debtor: the purpose of the law is to allow the turnaround and preservation of the business and this also allows the principle of financial liability provided by art. 2740 ICC to be derogated, so that the debtor can retain part of its own future earnings in order to ensure a sufficient capitalization of the company and prevent future distress.

The debtor is required to guarantee that creditors be paid under the concordato proposal an amount which is more than they would get in a liquidation of assets (pursuant to either concordato or bankruptcy), which is the alternative to the scheme proposed by the debtor who wishes to continue to trade. The benchmark in this respect should refer to what is practically feasible and not to all which may happen in theory, as this would require an effort incompatible with the close timing imposed by the state of distress of the debtor.

The Court of Florence rejected the opposition of the creditor and, having noted that the proposal satisfied the best interest of creditors’ test with respect to an alternative liquidation, confirmed the concordato preventivo proposal of the debtor.

Commentary
The decision of the Court is remarkable for the emphasis placed on the principle of liability of the debtor set forth by art. 2740 ICC, without prejudice to the best interest of creditors in comparison to an alternative liquidation: concordato preventivo is a means of implementing that principle, but this must be considered with reference only to the liquidation value of the estate.

Broadening the perspective, as noted by a prominent scholar (Fabiani, “La residualità del dogma della responsabilità patrimoniale e la de-concorsualizzazione del concordato preventivo“), if one considers the insolvency principles applied to a debtor continuing to trade, the meaning of the principle of liability of the debtor must be reconsidered. According to this analysis, which is to be fully shared, the bottom line is represented by the value of the assets in the alternative liquidation, and the resources generated from continued operation of the business can be allocated among creditors according to criteria that need not to strictly abide to the absolute priority rule and the par condicio creditorum principle, and can also accrue to the benefit of the debtor, provided that this will instead abide to the best interest of creditors test: the new rules entitling creditors to put forth their own concordato proposal allows them to challenge the debtor’s proposal and this makes the surplus available to be contended for and freely allocated.

Accordingly, case law and interpretations which still abide to a strict meaning of the principle set forth by art. 2740 ICC deserve to be reconsidered. An example is a recent decision of the Court of Milan rendered on 15 December 2016, ruling that «a concordato proposal based on a plan providing for continued operation of the business may not cause the principle of liability of the debtor to faint» and it is not «allowed to cancel the absolute priority rule (art. 2741 ICC), which follows from the principle of liability of the debtor, a rule which can be departed from only as a consequence of the actual liquidation of the estate following a forced sale».

 

 

The contents of this article is meant for informative purposes only and cannot be considered as professional advice.

For further information please contact Fabio Marelli, fabio.marelli@nctm.it

30/03/2017

The Court of Cassation (decision No. 4915 of 27 February 2017) lowered the threshold allowing the Bankruptcy Court to review the feasibility of the concordato preventivo proposal.

The case

The Court of Vibo Valentia denied the admission of a company to the concordato preventivo procedure due to the fact that the restructuring plan and the expert report on its feasibility were much too vague. In particular, this was the case of the plan’s milestone consisting in a reorganization arrangement to be entered with other companies which were still to be incorporated and regarding a joint venture with an international industrial group.

The local Court then declared the company’s bankruptcy, which was revoked by the Court of Appeals of Catanzaro. The receiver then challenged the decision in front of the Court of Cassation.

The issue

The issue concerns the limits and the scope of the assessment of the concordato plan by the Court in the merits, with respect to its elaboration following the well-known Court of Cassation’s decision No. 1521 of 23 January 2013 issued by the Joined Chambers of the Court.

The decision of the Court

The Court of Cassation reversed the decision of the Court of Appeals of Catanzaro, recalling its own decision No. 1521 of 2013, which stated that:

(i) the Bankruptcy Court can assess under certain conditions the feasibility of the plan irrespective of the certification issued in this respect by the expert appointed by the debtor, while it is up to the creditors to assess the chances of success of the plan from a factual point of view, since the creditors are those taking the risks arising therefrom;

(ii) in connection with the opening of the procedure, the Bankruptcy Court is not simply entitled, but is required to assess the plan in the merits, as far as the Court needs to exclude that – beyond any possible doubt – the concordato plan cannot be implemented.

In the specific case, the concordato plan and proposal and the validation of the expert were considered by the Court of Cassation to be too vague, because they did not set forth even high-level details of the business plan or drafts of the deeds of incorporation of the new companies taking part to the reorganization.

Commentary

The well-known decision No. 1521 of 2013 of the Joined Chambers of the Court of Cassation is the leading case on the scope and limits of assessment by the lower Courts of the feasibility of the concordato proposal. The Court of Cassation ruled in subsequent decisions that the concordato cannot attain its own purpose when “the proposal is beyond doubt unable to repay at least in part all creditors” (Cass. 4 May 2016, No. 8799) and when “the plan is clearly unsuitable at all for attaining the concordato plan and proposal’s goals” (Cass. 9 August 2016, No. 16830).

These principles have not been applied consistently by the lower Courts.

On one side, the Court of Appeals of Turin (decision of 17 April 2014) ruled that the Bankruptcy Court can simply take note of what it can be said for certainly that will not happen, while it should refrain from making a factual assessment when there is even a slight chance that something could happen.

On the other side, the Court of Pavia (decision of 14 October 2016) denied confirmation of a concordato proposal based on a plan providing for the debtor to continue to trade, arguing that there were very little chances that the plan and proposal could be implemented. The decision of the Court of Treviso dated 1 June 2016 shares the same line of argument, having ruled that a concordato plan and proposal is not feasible, whose implementation depends on future events which are uncertain and not clearly defined.

The issue – which perhaps could not be solved, due to the need to consider on a case by case basis all the different possible kinds of proposal and peculiarities of the specific situations – is that it is impossible to define in general terms a test whereby the plan can be said to be, beyond doubt, not feasible. Only the above mentioned, narrower interpretation does seem to be able to provide a defined guideline of the criteria that the lower Courts should follow in their review of the feasibility of the proposal.

The latest decision of the Court of Cassation seems to offer a new perspective, noting that the assessment of the feasibility of the concordato plan and proposal can directly involve the format of the plan and, in particular, the lack of sufficient information regarding the transactions to be performed by the debtor and third parties involved in the restructuring plan. This direction seems to be sound, as it recalls the one defined by the Court of Cassation for the assessment of the report of the expert appointed by the debtor to certify the feasibility of the proposal. The only risk in applying this test is that, on one side, Bankruptcy Courts could develop a strict formalistic approach in applying it and, on the other side, that the Courts could make an assessment into the merits, indirectly, through a review of the plan’s format.

 

 

The contents of this article is meant for informative purposes only and cannot be considered as professional advice.

For further information please contact Fabio Marelli, fabio.marelli@nctm.it

 

10/12/2016

The Court of Milan (10 November 2016) issued a confirmation order of a debt restructuring agreement pursuant to Art. 182-bis of the Italian Bankruptcy Law on a petition by an investment fund, which was deemed as a legal entity on its own right and not only a separate estate within the SGR which is the legal representative of the fund

The case
An SGR pleaded for confirmation of a debt restructuring agreement on behalf of a closed real estate investment fund, on the basis the fund’s assets were insufficient to meet the fund’s liabilities.The Court set the confirmation hearing and, in the meantime, granted a stay of enforcement actions on the fund’s assets pursuant to Art. 182-bis sixth para. IBL.

The issue
Art. 57, para. 6-bis TUF regulates a special judicial liquidation procedure of investment funds in a state of insolvency, but does not clarify whether – as an alternative to liquidation – an investment fund could also be eligible for debt restructuring agreements or concordato preventivo. According to Italian insolvency laws, only entities or persons are eligible to insolvency procedures and not the estate or the business unit as such which is owned or run by the enterpreneur: the estate of the debtor is managed within the procedure with an aim at discharging the debtor’s indebtedness as the owner of the assets pertaining to the estate. As a consequence, the main obstacle for an investment fund to be eligible to insolvency procedures alternative to judicial liquidation is that the fund is a separate estate, but is not considered as an entity or person.

The decision of the Court
The Court of Milan granted confirmation of the debt restructuring agreement pursuant to Art. 182-bis IBL, recalling its own recent decision (Trib. Milan, 10 June 2016, No. 7232) whereby the Court had already deemed as a legal entity on its own right, on the basis of various arguments including that based on the same Art. 57, para. 6-bis TUF which, by providing the judicial liquidation procedure of a fund, treats the same as a legal entity.

The decision of the Court is based also on the grounds that a fund (“irrespective of it being deemed as an entity”) must be eligible also to remedies to insolvency alternative to the judicial liquidation procedure.

In the rationale of its ruling, the Court also states that the confirmation proceeding of debt restructuring agreements pursuant to Art. 182-bis IBL does not fall within the definition of an insolvency procedure and, therefore, an SGR could also resort to it, considering that SGRs are not eligible for insolvency procedure different from liquidazione coatta amministrativa.

 

Commentary
The Court of Milan is well aware that its own ruling deeming investment funds as legal entities on their own right is a ground-breaking one, in a much wider perspective going far beyond the issue at hand. The Court, indeed, provides alternative grounds for its decision as to confirmation of the debt restructuring agreement: (i) the judicial liquidation procedure of investment funds is a sort of liquidazione coatta amministrativa, which is certainly an insolvency procedure (ii) investment funds “as such” are eligible for the judicial liquidation procedure and (iii) remedies alternative to liquidation must also be available to funds.
The decision of the Court is to be fully shared, as it is in line with arguments set forth by us in a previous newsletter. The rationale for the decision clearly sets the ground for making investment funds eligible also for concordato preventivo, on the basis that the general provision of Art. 3 IBL, which states that “entities subject to liquidazione coatta amministrativa are eligible to concordato preventivo. The Court indeed in its reasoning recalls that SGRs are not eligible for insolvency procedures (such as concordato preventivo) different from liquidazione coatta amministrativa, but the Court itself clarifies that SGRs act only as legal representatives of investment funds: there would be therefore no obstacle for a SGR to make a concordato filing on behalf of a fund, given that the SGR would in any case not be subject to the procedure in his own capacity, but only in its capacity as the SGR in charge of the single insolvent investment fund, which the SGR could continue managing in the ordinary course of business according to the general rules of concordato preventivo, and the SGR would not be involved as far as its own activity and other funds managed by the SGR are concerned.

 

 

The contents of this article is meant for informative purposes only and cannot be considered as professional advice. For further information please contact Fabio Marelli, fabio.marelli@nctm.it

To receive our restructuring newsletter write to: restructuring@nctm.it

10/12/2016

The Court of Pavia (14 October 2016) denies confirmation of a concordato preventivo plan and proposal approved by the creditors, based on the opinion of the Judicial Commissioner that the plan is clearly unsuitable to cure the debtor’s state of financial and economic distress

The case
A real estate company files a petition to the Court of Pavia for the confirmation of the concordato preventivo plan, providing for the company to continue to trade in order to generate the resources to pay the creditors under the proposal (so-called “concordato con continuità aziendale”). The Judicial Commissioner indeed explained in his reports to the creditors before and after the vote that, based also on the outcome of the carrying on of business during the procedure, the forecasts contained in the plan appeared clearly unsuitable to support the performance of the proposal after confirmation.

The issues
The issue concerns the scope of the evaluation of the plan by the Court in the context of the confirmation of the proposal. According to the Court of Cassation, only the creditors are entitled to evaluate the “economic feasibility” of the concordato, provided that they have been properly informed as to the grounds for evaluation, while the Court can assess the “legal feasibility” of the concordato. In particular the issue is whether the Court can deny confirmation if the plan and proposal are clearly not feasible from an economical and financial point of view, though considering this as a “legal feasibility” issue, lacking one of the underlying conditions of the concordato. 

The decision of the Court
The Court denied confirmation by ruling that the plan was clearly not feasible and this indeed frustrated the very purpose of the “concordato con continuità aziendale”.
In short, these is the reasoning of the Court:

  • the “concordato con continuità aziendale” is based on a plan providing for cash flows to be generated by future operations of the business and financial distress to be so cured;
  • the company’s restructuring is then the purpose of this kind of concordato;
  • the “economic feasibility” assessment is up to the Judicial Commissioner who should also make reference to the outcome of the business activity performed during the procedure;
  • in the specific case, the debtor incurred material losses jeopardizing the chances of success of the plan, which was also based on assumptions out of the debtor’s direct control;
  • the clear lack of feasibility of the concordato plan to attain the main goal of the procedure can be evaluated by the Court at the confirmation stage, as it pertains to the “legal feasibility”.

Commentary
The well-known decision No. 1521 of 23 January 2013 of the Court of Cassation is the leading case on the issues at hand: it is up to the Bankruptcy Court to assess the “legal feasibility” at the initial opening, revocation and confirmation phases of the procedure, while it is up to the creditors to assess the chances of success of the plan from a factual point of view, since the creditors are those taking the risks arising therefrom (“economic feasibility”).
The review of the Court as a matter of law consists in the assessment of the “real possibility to attain the purpose of the concordato proposal”, which varies in each case depending on the type of proposal, but in general means that the debtor will be able – by implementing the plan – to repay at least in part the unsecured creditors. The Court of Cassation ruled in subsequent decisions that the Bankruptcy Court can be satisfied that the concordato cannot attain its own purpose when “the proposal is beyond doubt unable to repay at least in part all creditors” (Cass. 4 May 2016, No. 8799) and when “the plan is clearly unsuitable at all for reaching the concordato preventivo plan and proposal’s goals” (Cass. 9 August 2016, No. 16830).
The issue is therefore to define the real scope of assessment by the Court in the specific circumstances of the given case: the principle is that the Court should not do any evaluation of facts in the merits, because “if beyond doubt the plan cannot be performed, no evaluation is involved” (Cass. 6 November 2013, No. 24970). The Court can then simply take note of what certainly will not happen, while it should refrain from making a factual assessment when there is even a slight chance that something could happen (Court of Appeals of Turin, 17 April 2014).
In the case at hand, the impression is that it could not be ruled out that the plan and proposal – although with very little chances – could possibly be implemented. Indeed, the circumstances seem to be not too different from those considered in the decision of Cass. No. 24970/2013 (namely: relevant losses, lack of a binding commitment by the banks to grant new loans, lack of guarantees to back the sale of property, lack of sufficient resources to fund the plan throughout its duration), which were all considered by the Court of Cassation as factual assessments barred to the Bankruptcy Court.
In the end, a factual assessment is in any case necessary in order to conclude that something is “clearly unfeasible”, which is not inherently a legal evaluation and is then subject to unavoidable margins of appreciation in the given case.

 

 

The contents of this article is meant for informative purposes only and cannot be considered as professional advice. For further information please contact Fabio Marelli, fabio.marelli@nctm.it 

To receive our restructuring newsletter write to: restructuring@nctm.it

Grounds for ineligibility or forfeiture of statutory auditors who are members of an association of professionals
Pursuant to Article 2399, letter c), of the Italian Civil Code, statutory auditors whose patrimonial relationships with the company or its subsidiaries may affect their independence cannot be appointed and, if appointed, cease from their office. It has been questioned whether the case whereby a statutory auditor is a member of an association of professionals providing consultancy services to the same company reflects the case provided for by the law. Although the answer to the question was generally affirmative, doubts still remain as to the criteria adopted by the Supreme Court in order to determine the cases in which the independence of a statutory auditor can be actually considered as compromised.

The scope of the delegation of management in limited liability companies (s.r.l.): content and limits
By decision no. 25085 of 7 December 2016, the Supreme Court established the legitimacy of a general delegation of management, by the board of directors to individual managing directors with the power to act separately, to the extent that it is not aimed at excluding the exercise of a concurrent managing power by the managing body.

Data processing for marketing purposes: the protection of legal entities
By order No. 4 of 12 January 2017, the Italian Data Protection Authority set out the discipline on personal data processing for marketing purposes, finding the unlawfulness of both the processing of data collected through forms available on websites and the processing of data (namely, telephone numbers) autonomously collected on the Web.

Administrative liability of entities under Legislative Decree No. 231/2001 within groups of companies
Liability can be found, under Legislative Decree No. 31 of 2001, on the part of a holding company for offences committed in connection with the activities of its subsidiaries, provided that a) the person acting on behalf of the holding company acts in concert with the person committing the offence on behalf of the controlled entity; and b) the holding company appears to have obtained a concrete advantage from, or pursued an actual interest by way of, the offence committed in the context of the subsidiary’s activity.

The liability of non-executive directors and the duty to act in an informed way
According to decision no. 17441, of 31 August 2016, of the First Division of the Supreme Civil Court, the liability of directors without management power cannot originate from a general failure to supervise – that would be identified in the facts as a strict liability – but must be attributed to the breach of the duty to act in an informed way, on the basis of both information to be released by executive directors and information that non-executive directors can gather on their own initiative. Therefore, the determination of the prerequisites for the liability of delegating directors fits in a context accentuating the distinction between the duties imposed on managing directors and those typical of non-executive directors.

Considerations regarding the possibility to waive the termination effect of a notice to perform
Judgment No. 4205 of 3 March 2016 of the Supreme Court, Second Division, gives us the opportunity to provide a brief overview of the different opinions expressed by courts and legal commentators regarding the possibility to waive the termination effect of a notice to perform.

Validity of the shareolders’ agreements which provide a preventive waiver of the liability action against the directors when taken at the conclusion of the mandate
With the decision of 28th September 2015, No. 19193, the Court of Rome stated the validity of the shareholders’ agreement clauses which provide that the “incoming” shareholders undertake not to bring the liability action against the “outgoing” directors or not to vote for it in the general meeting.

The Supreme Court’s overruling: the banking and finance agreement signed exclusively by the client is null and void
The Supreme Court decides again the issue of the validity of the so called “single signature” agreements, i.e. the copy of banking and finance agreements, kept in the bank’s archives, bearing the client’s signature and not the bank’s one. The Supreme Court holds that these agreements are null and void, thus unenforceable vis à vis the account holder.

Purchase of shares of a general partnership: can the mistake on the value of the share be legitimately qualified as an essential mistake?
The Tribunal of Milan has stated that, as a rule – also with reference to the purchase of shares of a general partnership – the contract can be avoided, upon application of a party, for an essential mistake, only if the contract contains an explicit guarantee on the value of the assets and on the quality of the goods of the company (a guarantee that, according to the Tribunal, the contract at hand lacked).

The new rules regarding the proceedings before the Supreme Court (Decree Law n. 168/2016, converted into Law n. 197/2016)
With another “late summer intervention”, the legislator intervened once more as a matter of urgency to modify the code of civil procedure, with particular reference to the rules regarding the proceedings before the Supreme court: on August 31, 2016, Decree Law n. 168/2016 was published, entitled “Urgent measures for the resolution of disputes before the Supreme Court and for the efficiency of the judicial offices” (“D.L. 168/2016”).

The joined chambers of the court of cassation on the qualification and challenge of the non-final award and of the partial award
“An award that partially decides on the merits of a dispute, immediately challengeable pursuant to art. 827, paragraph 3 of the code of civil procedure, is both that of a generic condemnation pursuant to art. 278 of the code of civil procedure, and the award that decides one or some of the questions of the case, without defining the entire proceedings; instead, the awards that decide preliminary issues are not immediately challengeable.”

Europe Must Go On 

The 60th anniversary of the Treaty of Rome sees the EU much changed from its early origins. We have moved from an economic community to a Union based on civil and human rights and the values common to the peoples of Europe. It has been, and is, a great success.

 

However it is clear that the Union is not without its troubles on this important anniversary. The Brexit negotiations are about to start. There are nationalist and decentralizing tendencies in many Member States and important elections in Germany and France. There are real problems of immigration and the absence of, or the uneven distribution of, economic growth.

 

These problems should not daunt us. Our fathers in the integration process faced greater problems. They sought to make peace and to make an institution to guarantee peace from the ashes of the most destructive of European wars.

 

What we must do is face up to our problems and resolve them. We have great shoulders to stand on. We have been given the evolving EU treaties, the Single Market, a strong Court of Justice in Luxembourg, good competition law, the rights of citizens, in other words a strong legal framework.

 

This is no time for faintheartedness. We must move on with courage and ensure that the Union is with us for more than another 60 years.

In this issue, we analyse a decision of the Italian Consiglio di Stato according to which the publication of applications for renewal of existing maritime port concessions in the EU Official Journal is not required. Any third party wishing to submit competing bids is however guaranteed by the possibility of preventively inquiring about the expiry of a concession as well as by the investigation conducted by the Port Authority (today Port System Authority), which must comply with the principle of selecting the tenderer offering the «best guarantees for a profitable use of the concession».

We then examine the differences in Italian law between a contract of carriage and a procurement contract for the supply of carriage services. It is important to properly classify the type of contract, and here we explain why.

Let us then examine two recent judgments of the Italian Regional Administrative Courts. The first one is on the possible ways of awarding a maritime concession. The second one relates to the applicability of the Italian Public Procurement Code to the management of intermodal freight terminals, the unavoidable consequences of which are summarised here.

In light of the forthcoming entry into force of the IMO Convention for the Control and Management of Ships’ Ballast Water and Sediments, we look at the impact it is expected to have on the shipping sector. One of the major problems is that, to date, there are no clear indications on how to make ships compliant with the new standards. Moreover, there are countries who have more stringent regulations than the IMO Convention. The risk is therefore to invest in equipment that can be deemed unsuitable at a later stage.

A recent ruling of the Italian Supreme Court allows us to briefly discuss the issue of non-payment of insurance premiums and consequent suspension of cover. The Supreme Court confirmed that insurance coverage applies if an insured event occurs within the «grace period», regardless of whether the next premium instalment is paid.

Concerning airports, the Italian Supreme Court opened the door to possibly finding liability on the part of ENAC (the Authority supervising airport activities and air transport in Italy) in case of airplane damage caused by poor maintenance of taxiways.

Finally, we conclude with our usual review of the news from the world of maritime and port labour. The most important news is about the renewal, in Italy, of the National Collective Bargaining Agreement for shipping agencies’ executives, which brought some improvement to the current situation.

We want to thank our colleagues at Nctm Brussels’s office for their contributions highlighting the most significant actions taken by EU institutions in the international shipping and trade sector.

You will also find a list of our events taking place at our Milan and Rome offices, in addition to the usual update on our firm’s activities over the past two months.

According to the Court of Cassation a concordato plan not describing in detail how it can be implemented is not feasible
The Court of Cassation (decision No. 4915 of 27 February 2017) lowered the threshold allowing the Bankruptcy Court to review the feasibility of the concordato preventivo proposal.

Does a concordato proposal need to assign all future earnings to the creditors ?
The Court of Florence (November 2, 2016) confirmed that the debtor can retain part of his assets, with a view to support the company’s recovery and in derogation to principles of liability of the debtor

Cram down pursuant to Art. 182-septies of the Italian Bankruptcy Law, if the agreement is more convenient for the bank than bankruptcy liquidation
A ruling of the Court of Padua of 31 December 2016 is compared with few other known Court decisions regarding the extension of the effects of a debt restructuring agreement to dissenting financial creditors

 

 

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