The new composition negotiated for the solution to the business crisis

On 21 October of the current year, decree law no. was converted into law. 118/2021, already in force since August 25th. Starting from next November 15th, the conversion law 147/2021 will introduce the new institution of the negotiated settlement of the crisis: the institution will be activated on a voluntary basis at the request of the entrepreneur who presents a situation of reversible patrimonial or economic-financial imbalance.

If, in fact, the recovery of the company is possible, the interested party will be able to request the competent Chamber of Commerce to appoint an independent expert who will facilitate the negotiations between the entrepreneur, creditors and any other interested parties. The appointment will take place among the subjects registered on the specific list and will have the aim of identifying a solution to overcome the imbalance conditions identified. The solutions could also be the transfer of the company or branches of the same.

On the other hand, in the presence of situations of patrimonial or economic-financial imbalance that generate a crisis or insolvency, the control bodies (where existing) must report in writing to the entrepreneur or administrator the existence of the conditions for the negotiated settlement.

ASPECTS AND CHARACTERISTICS OF THE NEGOTIABLE SETTLEMENT

During the negotiation of the negotiated settlement, the entrepreneur retains the ordinary and extraordinary management of the company and, where there is a probability of insolvency, he has the duty to manage the company in such a way as to avoid prejudice to the economic-financial sustainability of the business.

The negotiations take place between the entrepreneur and the interested parties individually and in complete autonomy from each other. The expert appointed by the competent Chamber of Commerce will be present on this occasion with the function of facilitating mediation and guaranteeing the absence of prejudice for creditors.

It is important to underline that the law does not provide for the obligation to appeal to the Court.  The intervention of the Court may be requested by the entrepreneur for authorization to contract new financing or in the case of extraordinary operations.

REWARD MEASURES AND BENEFITS

The new institute of negotiated settlement appears to be a faculty to the advantage of the entrepreneur who will no longer be obliged to appeal to the competent Court. In addition to this undeniable relief, the law. 147/2021 provides for a series of reward measures and additional advantages relating to:

• the reduction to the legal amount of the interest that accrues on tax debts;
• the exemption of the entrepreneur from crimes pursuant to articles. 216, paragraph 3, and 217 of the bankruptcy law for payments and operations carried out during negotiations;
• suspension from recapitalization obligations and causes of dissolution in the event of reduction or loss of share capital;
• exemption from clawback for actions carried out in accordance with the negotiations and according to the recovery objectives;
• reduced tax penalties and the possibility of paying in installments the taxes due but not paid in 72 installments;
• the definition of an agreement that generates the same effects as a recovery plan, without the need for certification;
• the possibility of stipulating debt restructuring agreements pursuant to articles. 182 - bisseptiesnovies, 
• alternatively propose a request for a simplified composition with creditors for the liquidation of assets or to access other insolvency or alternative bankruptcy procedures;
• authorization by the Court and renegotiation of contracts worthy of preserving business continuity, pursuant to art. 10 of the Decree and preservation of the effects pursuant to art. 12 of the Decree.

Furthermore, if it deems it necessary to protect the assets from initiatives that "could disturb the regular course of the negotiations and put the recovery of the company at risk

CONCLUSION OF THE NEGOTIATED SETTLEMENT

Following the negotiations, the entrepreneur and the parties involved with the facilitation of the appointed expert will arrive at identifying a solution suitable for overcoming the situation of patrimonial or economic-financial imbalance which makes the crisis or insolvency of the company probable.

In this phase, at the conclusion of the negotiated settlement, the parties will be able to:

• sign an agreement, with one or more creditors, suitable to ensure business continuity for a period of no less than two years according to the expert's final report;
• conclude an agreement signed by all the parties involved in the negotiation, including the expert, who produces the effects of the certified plan pursuant to art. 67, paragraph 3, letter d), Bankruptcy Law, without the need for certification;
• propose to access the new institution of the simplified liquidation agreement, provided for by art. 18, Legislative Decree no. to inform neither the Court nor the Public Prosecutor, except in the case of requesting protective or precautionary measures.