Bankruptcy in Italy - Get in Touch with our Lawyers

Updated on Monday 07th March 2022

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The Italian Bankruptcy Law governs the insolvency procedures for companies that are facing financial problems and can no longer continue their business activities. Pre-bankruptcy procedures as well as debt restructuring actions are possible in the country and the law aims to provide adequate solutions for companies that are going to a restructuring phase. Professional help is very important during all of the stages of bankruptcy and the experts at our law firm in Italy can help you deal with creditors or debt recovery.

When is a company declared bankrupt?

Italian companies are considered insolvent when they cannot meet their financial obligations towards their creditors. The bankruptcy proceedings are initiated after the company has filed for insolvency. According to the law, debtors have two options to deal with financial problems:

Pre-insolvency proceedings - a settlement between the debtor and the creditor in which the first must give up some of the assets. It is given more time to make the necessary payments and continue the commercial activity.
Settlement with the creditors - a plan for restructuring debts examined and allowed by court.

The company or the creditors can file for bankruptcy in Italy at the Registrar of Companies. Our bankruptcy lawyers in Italy can tell you more.

Bankruptcy proceedings in Italy

The pre-insolvency proceedings as well as the settlements with the creditors are two ways for companies to manage any financial difficulties. The Bankruptcy Law was amended through a Decree that allows for more flexibility and improved solutions in debt situations.

Companies that choose to conclude a settlement with the creditors (concordato preventivo) must be ready to offer at least 20% of the unsecured claims before the agreement is submitted to an Italian court for approval. In any creditor arrangement, should the debtor delay the due payment, the court is promptly informed of this action. The court can appoint a judicial administrator to help manage the situation.

Bankruptcy petition in Italy

Italian Bankruptcy Law and more precisely Article 6 says that the bankruptcy procedure starts with a claim made by any of the creditors of the "insolvent" debtor. This request can also be made by the prosecutor or the debtor himself, in this case, the company. Here are other details:

The insolvent debtor has no obligation to file for bankruptcy in Italy. However, a debtor who postpones the application commits a crime.
This type of offence may also be called into question if the submission of the petition has been postponed due to the initiative of a voluntary extrajudicial concordance plan.
This liability before the law may also be imposed on the advisers who assisted the debtor company.
Any delay by the directors of the debtor company in applying for bankruptcy can also be interpreted as mismanagement.
The management body of the company in question must file for bankruptcy in Italy.
The public prosecutor can do the same if the debtor can no longer be found.

Our bankruptcy lawyers in Italy can provide you with more information on filing for bankruptcy in Italy and the formalities required.

Bankruptcy formalities to consider

Filling for bankruptcy is done at Bankruptcy Court in the district or city to which the company or business belongs. This requires tax books and a company's balance sheet to include information for the last three fiscal years. Here are other important formalities:

Asset valuation and a report are required when filing for bankruptcy.
The list of creditors is provided, as well as relevant claims.
Gross revenues related to the last 3 fiscal years must be found in another document.

If the court considers that the bankruptcy formalities have been fulfilled, then it proceeds to the procedures necessary for the declaration of bankruptcy in Italy. We mention that this type of petition can be challenged in 30 days. All the details in this regard can be discussed in detail with our bankruptcy lawyers in Italy.

What is the role of the bankruptcy receiver?

Bankruptcy receiver is a public officer who can be an expert accountant or lawyer with experience in the field. He/she has the role of supervisor in bankruptcy proceedings in Italy. Moreover, he/she deals with the review of claims submitted by creditors, analyzes and disposes of the company's assets, prepares a list of debtors' responsibilities, which he/she submits to the court.

The bankruptcy receiver is also the one who can put a seal on the assets and who can deal with the liquidation of the company, according to the law.

The public office has 60 days to create a liquidation plan for the company. This plan is then submitted to the agreement of the committee members of creditors. A bankruptcy receiver can work with our lawyer in Italy in order to offer the best solutions to those who want to file for bankruptcy.

Why work with our bankruptcy lawyers in Italy

We have experience in this field and we can offer specialized consulting for business owners, in case of bankruptcy. This procedure is a complex one and can last for several years. That's why you need an expert to give you complete details.

Here are some statistics about companies in Italy:

In Q1 of 2021, there were about 2,539 bankrupt companies.
Q4 of 2020 saw a number of approximately 2,900 companies go bankrupt.
In 2020, the risk of bankruptcy of companies with activities in the manufacturing and textile sector exceeded 5%.

For detailed information about the bankruptcy procedures in Italy as well as professional legal counseling and assistance you can contact the experts at our law firm in Italy.