Italy Tweaks the Bankruptcy Act to Increase Creditors' Protections
By BRUNO COVA, ANTONIO AZZARA, PAOLO MANGANELLI, & ANTEO PICELLO
On 21 June 2013 Italy issued an emergency decree (“2013 Decree”) introducing a number of provisions aimed at fostering the economy and attracting foreign investments.
Certain provisions of the 2013 Decree amend the Bankruptcy Act by introducing rules aimed at avoiding abuses and increasing transparency in debt restructuring proceedings.
More precisely, the 2013 Decree introduces three key amendments that increase creditors’ protections, as better described in the attached article: (1) Avoid abuse; (2) Increase transparency; and (3) Enhanced role of creditors.
As a consequence of these measures, the position of creditors will be protected from abuses, and they will have access to information relating to the debtor. This in turn will allow creditors to form a better view of the debtor’s situation, thus making pro-active restructuring strategy (e.g. loan-to-own, creditor-led solutions, and the search for a third-party investor) easier to pursue.