Italian Restructuring Proceedings: Recent Developments in Prepackaged Plans of Reorganization
By Antonio Azzarà, Paolo Manganelli and Carmen Di Marino
As a result of recent reforms to the Italian Bankruptcy Law (the IBL), the so-called Article 182bis proceeding a device which, in some aspects, resembles the prepackaged plan under Chapter 11 of the U.S. Bankruptcy Code has become a legitimate option for distressed Italian companies seeking to restructure with the goal of overcoming financial crisis.
As compared to other pre-bankruptcy instruments, such as the Article 67 proceeding and the Concordato Preventivo procedure, the Article 182bis proceeding was seldom used before 2009. In the past year, however, Article 182bis has become increasingly common in the restructuring practice, due in large part to recent decisions by Italian courts, which have shed some light on the new procedure, clarifying uncertainties that had previously discouraged the various distressed market players from seeking recourse through Article 182bis.