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New Italian Measures Facilitate Debt Restructuring and Protect DIP Financing

October 26, 2012

By BRUNO COVA, ANTONIO AZZARA, BERNADETTE ACCILI, PAOLO MANGANELLI, & ANTEO PICELLO

On September 11, 2012 the law decree No. 83 of June 22, 2012 converted with amendments into law No. 134 of August 7, 2012 (the Decree) which provides emergency measures for the reorganization of the incentives to foster development and growth of the Italian economy, entered into effect.

Notably, the Decree has introduced material changes to the Italian Bankruptcy Act1 (IBA) that have the effect, amongst other things, of facilitating debt restructuring and company bailouts, thus enhancing investment opportunities in distressed situations (the New Provisions).

The Decree represents the very last step of a reform movement of the Italian bankruptcy system which began in 2004 with the aim of improving its effi ciency and making the Italian distressed market more appealing for potential domestic and international investors.