On October 11, 2017, the Italian Parliament passed a law (the “Reform Law”), which authorizes the Government to introduce a sweeping reform of Italy’s bankruptcy legislation (which dates back to 1942 but was subject to significant amendment in recent years) in accordance with certain principles set out in the Reform Law.
The reform is expected to entail a major overhaul of Italy’s bankruptcy and restructuring framework, including by (i) introducing alert measures seeking to identify and address distress situations at an early stage, (ii) facilitating the restructuring of corporate groups, (iii) limiting the use of judicial compositions with creditors (concordato preventivo) to going-concern restructurings, and (iv) allocating jurisdiction for proceedings concerning large debtors to specialized courts.
The reform will also entail a review of the Civil Code provisions on security interests and is expected to affect various other aspects of Italian corporate law.
The Italian Government has been mandated to implement the reform within 12 months.