Insolvency proceedings refer to any proceedings related to the regulation of the relationship between a firm in crisis and its creditors. Before being able to set the proceedings in motion, the firm must adhere to certain requirements established by law.
The main purpose of this type of procedure is to provide protection to the creditors by attempting to lead the firm out of its period of crisis. The business owner subject to these procedures is forbidden from having the firm or any goods in his control as these pass to the hands of a specially appointed body.
The most notable procedure is bankruptcy, which is regulated by the Legislative Decree n. 5 of 9th January 2006. This decree also controls the procedures of the concordato preventivo (composition with creditors), administration and liquidation.
In order to declare bankruptcy, a firm must fulfil certain requirements and it is important to note that public bodies and small businesses are exempt from this procedure. A state of insolvency must be recognised (inability to pay debts). The main task of the official receiver is the management of all the procedures linked to the declaration of bankruptcy and the bankrupt’s estate.
The concordato preventivo is a special procedure through which the law tries to assist a business owner in a state of insolvency or crisis. Where possible, the aim of it is to prevent a declaration of bankruptcy whilst meeting the needs of the creditors and protecting their interests. The main objective of the concordato preventivo is to help a firm out of a crisis and to allow it to continue. Another advantage of this procedure lies in the fact that creditors are able to avoid the red tape for bankruptcy proceedings by obtaining partial or full payment of the debt from the business owner in a shorter time frame.
There are many rules and regulations relating to this procedure and they are subject to continuous revisions. As a result of this it is particularly useful to speak to a team of professionals with proven experience in this area. Studio Bocca is able to offer valid and competent guidance in the field of insolvency proceedings.
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