The Crisis of Companies from an Italian Perspective: Reorganization and Fresh Money

Today, the role of fresh money in the reorganization of companies is a central matter in the Italian crisis law. The analysis comes from the recent reforms of the Italian Bankruptcy Law, aimed at revitalizing the pre-insolvency procedures for overcoming the crisis of companies. These reforms draw inspiration from Chapter 11 of the U.S. Bankruptcy Code. In particular, three new rules have been introduced in the Italian Bankruptcy Law in order to facilitate the obtaining of credit by companies in crisis. These rules recognize priority in reimbursement for claims related to financing. Their target is to incentivize those (not only banks) who want to grant new finance to enterprises in crisis. The target is so important for the legislator that the rules permit the discrimination of companies' creditors on the basis of a judicial valuation of the conditions required for priority by the law in specific cases. The traditional and important principle of equal treatment of unsecured creditors is even more neglected. But the specific meaning of the rules and their inclusion in a sort of company crisis law in time of crisis induce to confine the forms of credit to which the rules refer to and to limit the space for extensive interpretations or applications by analogy. Copyright © 2016 INSOL International and John Wiley & Sons, Ltd.