The Italian Insolvency Code – A Work in Progress: Calendar and News | Jones Day

By Decree-Law No.118 of 24 August 2021 (the “Decree-Law”), the Italian government postponed the entry into force of the Insolvency Code, which provides for an in-depth reform of the Italian law on ‘insolvency.

In particular, the entry into force of the Insolvency Code, which was to enter into force from September 1, 2021, has been postponed to May 16, 2022, and the early warning procedures to identify and possibly remedy crises in early phase (ie Title II of Part I of the Insolvency Code) has been postponed to December 31, 2023. This postponement will allow the Insolvency Code to be better adapted to the new socio-economic scenario. -Italian economy, which has been hard hit by the COVID-19 pandemic, as well as to adapt to the framework set by Directive (EU) 2019/1023, which must be transposed before July 2022.

In addition, the Legislative Decree: (i) introduces into the Italian insolvency legal framework a procedure for the negotiated settlement of a commercial crisis (called “composition negotiated for the solution of the corporate crisis“), which is an extrajudicial tool intended to facilitate the reorganization of the activities of companies where the crisis is still potential and reversible; (ii) provides for certain modifications to Law No. 267 of March 16, 1942 (the” Bankruptcy Law “), including the introduction with immediate effect of new Articles 182-septies (restructuring agreements with extensive effects), 182-gs (interim standstill agreements) and 182-Nine times (facilitated restructuring agreements) aimed at expanding access to debt restructuring agreements and anticipating certain measures included in the insolvency code; and (iii) introduced certain temporary measures to combat the impact of the COVID-19 pandemic.

Although the decree-law entered into force immediately, it is subject to a procedure of conversion into law before the Italian Parliament, which could take up to 60 days after the date of entry into force of the decree-law, and may end with the approval by the legislator of the original text of the decree-law (with or without modifications) or its rejection. In the latter case, the legislation would be deemed ineffective upon entry into force.