Client Alert

Italys Emergency Budgets Provisions Facilitate Restructurings Updated

August 04, 2010

Bruno Cova, Antonio Azzarà & Paolo Manganelli

This is an updated version of the StayCurrent Client Alert published on 1st June 2010 Italys Emergency Budgets Provisions Facilitate Restructurings, following the conversion of the relevant emergency decree into law on 30 July 2010.

In the context of its €24 billion emergency budgetary measures aimed at addressing current market turbulence, Italy has introduced a range of changes to the Bankruptcy Act that will have the effect of facilitating restructurings and providing investment opportunities in distressed situations.

The new measures have been enacted through an emergency decree issued in June, which was converted into law on 30 July 2010. The law has confirmed most of the measures of the emergency decree but it has also introduced a few amendments and improvements: (i) a more effective automatic stay period for the Article 182-bis procedure; (ii) new financing granted during the Concordato Preventivo may be treated as a priority claim after the order of the court that admits the petition for Concordato Preventivo; (iii) the risk of criminal charges for both debtors and lenders in connection with transactions executed in furtherance of a Concordato Preventivo, Article 182-bis or an Article 67 procedure is significantly reduced.

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