The corrective decree ter to the Business Crisis Code (CCII)

News for the Negotiated Settlement of the Crisis (CNC) and the opening to tax settlement

The draft legislative decree is made up of 52 articles, containing supplementary and corrective provisions to the CCII referred to in legislative decree no. 14/2019. The corrective fits within the framework of the commitments undertaken with the PNRR, in particular, the decree corrects some defects in regulatory coordination that emerged following previous legislative interventions, amends some material errors and updates the regulatory references, as well as provides clarifications to some interpretative doubts that emerged during the application of the CCII code.

Below, the main innovations analyzed in chronological order, with an in-depth analysis regarding the tax transaction.

Art. 16, paragraph 5 – Duties of Banks in Negotiated Settlement

Banks are obliged to maintain existing credit lines during the negotiated settlement procedure of the crisis and cannot suspend or revoke them simply because of the start of the procedure. This provision is crucial to ensure that companies in crisis can continue to operate without financial disruption, maintaining the liquidity necessary for daily operations.

Art. 18 – Protective Measures

Protective measures are automatically extended to all creditors, unless otherwise specified. This provides uniform protection to facilitate negotiations and reduce the risk of individual enforcement actions that could undermine the recovery process. Protective measures are essential to maintain stability during negotiations and prevent creditors from acting in a way that could damage the overall process.

Art. 23 - Extension of the Tax Settlement

The possibility of proposing a settlement agreement with the Revenue Agency (AdE) is extended to Restructuring Plans Subject to Approval (PRO). This change expands options for distressed businesses, providing greater flexibility in managing tax debts and improving recovery opportunities. The tax transaction may include the definition of agreements with the tax authorities which provide for the partial payment or deferral of debts, thus guaranteeing greater negotiation and recovery capacity for the company.

It has been added to the art. 23 a paragraph 2 bis which regulates the possibility for the entrepreneur to formulate, during the negotiations, a proposal for a settlement agreement to the tax agencies and the Revenue Agency-Collection which provides for the payment, partial or deferred, of the debt and related accessories. There is no mention, with regard to the negotiated composition, of the credits of the social security institutions and this lack certainly represents a significant limit to the successful completion of this procedure.

It is established that the proposal cannot be formulated in relation to taxes constituting the European Union's own resources (VAT), thus reviving the thesis of the unavailability of such taxes by the State. It should be underlined that this limit is expressly introduced only for the negotiated settlement.

Annexed to the proposal is the report of an independent professional who certifies its convenience for the public creditor compared to the alternative of judicial liquidation and a report on the completeness and truthfulness of the company data drawn up by the person in charge of the statutory audit, if existing, or by a statutory auditor registered in the appropriate register designated for this purpose.

The agreement is signed by the parties and communicated to the expert and produces effects with its filing with the competent court pursuant to art. 27 of the code. It is worth remembering that the negotiated settlement does not necessarily require the involvement of the court, when protective or precautionary measures or authorizations are not required. For this reason the rule refers to art. 27 to identify the competent court. The criterion adopted is also compliant with what is foreseen for the other interventions of the court during the negotiated settlement.

In case of failure to reach an agreement, the entrepreneur will still be able to pursue the recovery of the company by resorting to one of the tools for regulating the crisis and insolvency and obtaining from the judge in that context the cram down

The agreement is automatically resolved in the event of the opening of judicial liquidation or controlled liquidation or to ascertain the state of insolvency or if the entrepreneur does not make the payments due in full within sixty days of the scheduled deadlines.

Art. 25-octies - Reporting by the Supervisory Body

The timely reporting of crisis conditions also becomes mandatory for legal auditors, with a deadline of 60 days from discovery of the crisis. This obligation aims to ensure prompt identification and management of corporate crises, encouraging a timely response to the first signs of financial difficulties. Timely reporting is essential to prevent the deterioration of the financial situation and to promptly initiate the necessary recovery measures.

Art. 25-sexies – Simplified Composition

The possibility of partially satisfying creditors with privileges or mortgages is introduced. This measure facilitates the simplified composition process, avoiding the complete liquidation of company assets and allowing for quicker and less costly restructuring. This provision is particularly important because it allows companies to preserve part of their productive assets, essential for operational continuity and to generate future revenue necessary for recovery.