Italy

The above-mentioned rules apply as well to commercial debts that arise after the filing of the application for the admission to the concordato preventivo procedure. However, if these debts arise following the filing of a preventive request for the admission to the concordato preventivo procedure under Article 161, VI co of Italian Insolvency Law, these debts are considered pre-preferential as long as the plan and the requested documentation are presented within the term set out by the judge, and the procedure follows pursuant to Article 163 of Italian Insolvency Law.

Labour, Benefit, and Pension Issues

The insolvency of a business is a situation in which losses need to be distributed amongst creditors and stakeholders. While the possibility and probability of an insolvency is calculated and covered by some creditors, other creditors are hit harder by suffering a write-off on their claims in the course of an insolvency process. The latter is especially true for employees and pensioners depending on the solvency of their (former) employer. Their limited capacity to suffer losses has prompted a special treatment of these stakeholders and, therefore, requires a specific analysis.

Austria

Austrian insolvency law facilitates such restructurings as it enables the conclusion of a reorganisation plan already if the debtor is able to offer to the (unsecured) creditors to pay a quota of at least 20 per cent on their claims within two years after the reorganisation plan's approval. As a result of the reorganisation plan being approved by the required majority of creditors and confirmed by the insolvency court, the creditors forfeit any portion of their claims exceeding the agreed quota.

Sales on a Going-Concern Basis

For many entrepreneurs, selling your business is an unique, once-in-a-lifetime event. Selling or transferring one’s business to a third party is in many ways radical. First, in a rather irrational way: selling your business means goodbye to what has been built or continued for several years or for decades. Second, more rationally, entering into a selling process brings its own dynamics: informally attracting candidate buyers or find candidates via public marketing, exchanging business information, negotiation phase, a letter of intent, including clauses on confidentiality, due diligence, valuation and price-setting and the role of certain conditions precedent and guarantees in the entire proces, and finally closing the deal and transfer the business. In addition to its specific contractual clauses relevant for each individual sales process, other legal issues surround such a sale and transfer. On the buyer’s side for instance the way to finance the acquisition, antitrust pitfalls, stock listing requirements or requirements for transferring public law permits, certifications and licences or the uncertainly relating to the possible loss of carry forwards against taxation that may require the consent of third parties to be transferred, if they can be transferred at all).

Italy

This report states the law in Italy as at 16 March 2019. Delegation law (legge delega) no 155 of 19 October 2017 provides for the principles to be followed by the Italian government in drafting the reform bills (decreti delegati) aimed at significantly amending the existing bankruptcy law. The principles included within the said delegation law provide, among others, for amendments to the existing insolvency proceedings (with the exception of Amministrazione straordinaria), inclusive of the renaming of the fallimento (bankruptcy) proceeding into judicial liquidation proceeding; introduce the so-called ‘alert procedures’ as well as the possibility to appoint a mediator within a restructuring proceeding; provide rules on group insolvencies. The Italian government issued on 12 January 2019 legislative decree (decreto legislativo) no. 14, named ‘codice della crisi e dell’insolvenza’ which was published on the Official Gazette of the Italian Republic on 14 February 2019 which shall become effective on 15 August 2019 (art. 389). Certain specific provisions of law shall, however, become effective after 30 days from its publication. Decree 14/2019 shall have a major impact on certain rules regarding, among others, the following restructuring proceedings: concordato preventivo; accordi di ristrutturazione; composizione della crisi da sovraindebitamento.

Poland

Reform of the Polish insolvency law completed on 1 January 2016 has substantially changed the legal scene in Poland with instruments available to debtors to complete a reorganisation of their business with success. The reform affected both substantive and procedural law and placed them among the most advanced in the European Union. A substantial increase in the number of opened restructuring proceedings combined with a decreased number of bankruptcy proceedings (on a year to year basis) are indirect proof that the reform has been a success.

England and Wales

A fixed charge receivership also does not fall neatly within either a pre-insolvency regime or an insolvency procedure. A fixed charge receivership is contractual in nature. A fixed charge receiver can be appointed over a fixed charge asset where the relevant trigger set out in the charge document (usually called a debenture) has been met.

Inventory Report on International Recommendations from Standard-Setting Organisations

Various instruments referred to in this Report also include a set of definitions. Therefore, when reference is made to specific recommendations in this Report, these definitions still apply. In addition, the following definitions are provided: Business rescue: Except where specified otherwise, references to business rescue should be understood as encompassing both the rescue of the debtor (such that the entity itself survives) and the rescue of the debtor’s business on a going-concern basis (whether or not the business continues to 1090 be carried on in the same entity).

Spain

There are a set of rules set forth in the Insolvency Act (‘Ley 22/2003, of 9 July, Concursal’ or ‘LC’) which purpose is to avoid that debtors file for formal insolvency proceedings. These rules aim to: (i) establish safe harbours for Refinancing Agreements (‘Acuerdos de refinanciación’); (ii) stay enforcement actions in the pre-insolvency stage; and (iii) allow cramming down secured and unsecured creditors in the pre-insolvency phase. Further there are some tax rules aimed to facilitate out-of-court and in-court workouts. However, there is no state agency, judge, court or tribunal that offers assistance in the negotiation of an out-of-court workout.

Latvia

According to the paragraph 62 part 3 of Latvian Insolvency Law the debtor (legal person) is obliged to file for insolvency proceedings (liquidation) if the debtor is not able to service its debts and it is not possible to file for legal protection procedure (court approved reorganisation) or to reach out of court settlement with creditors. According to Latvian legislation the management of the debtor is criminally liable for hesitation to file insolvency petition and according to the mentioned provisions of Insolvency Law management of a debtor may avoid criminal liability if they try to reach out of court restructuring.