Restructuring & Turnaround – May 2016
The effects of bankruptcy declaration date back to the concordato filing also if there is a gap between the two procedures
The Court of Cassation (29 March 2016, No. 6045) ruled that the look-back period for claw-back actions starts from the concordato filing, when bankruptcy was declared after a period of time, provided that both procedures refer to the same insolvency situation.
Still unsettled the issue of delayed payment of secured creditors in concordato preventive ?
The Court of Modena (8 February 2016) challenged precedents of the Court of Cassation ruling that delayed payment of secured creditors is allowed only if the timing would not be shorter in bankruptcy liquidation.
Collection of debtor’s receivables and set-off security rights of the bank can be stayed after concordato pre-filing, but the debtor is not in control of amounts cashed
The Court of Bolzano (5 April 2016) confirms that revolving credit facility agreements providing for ancillary set-off and collection terms in favour of the bank can be suspended, but the bank is protected because the amounts collected are controlled by the Judicial Commissioner.