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Italian Special Administration (a solution for restructuring of large companies in crisis) Luigi Lai...
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Italian Special Administration (a solution for restructuring of large companies in crisis) Luigi Lai Author’s research is supported by Autonomic Region of Sardinia PO Sardegna FSE 2007-2013. L.R.7/2007 “Scientific research and innovation technology promotion in Sardinia”
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Transcript of Italian Special Administration (a solution for restructuring of large companies in crisis) Luigi Lai...
Italian Special Administration
(a solution for restructuring of large companies in crisis)
Luigi LaiAuthor’s research is supported by
Autonomic Region of SardiniaPO Sardegna FSE 2007-2013. L.R.7/2007
“Scientific research and innovation technology promotion in Sardinia”
Italian Special Administration
aims at providing legal tools capable of rescuing companies
facing insolvency
Saving Companies
Intrinsic Value
Not every company may file for Special administration
Specific requirements have to be met
Requirements changed in the course of time
First Special administration
Legislative Decree No.270/1999
Occupying more than 200 employees.
A certain level of indebtedness (above 2/3 of annual company's revenue)
First Special administrationProceeding
The court had to nominate one or more Special Administrators
The Special Administrator has 30 days for completing a reportOnly after that the Court decide
if conceding SA to the Company
Special Administrationfor Large Insolvent Companies Legislative Decree No 344/2003
Parmalat Case14bn Euro hole in its accounts and nowadays it is
Europe's biggest bankruptcy case.
Special Administrationfor Large Insolvent Companies
New quantitative requirements
New and faster procedure
Special Administrationfor Large Insolvent Companies
the Special Administrator is appointed directly by
the Ministry
No ex ante preliminary report need in order to
obtain SALIC
Special Administrationfor Large Insolvent Companies
The SALIC procedure differs from the normal SA because
is devoted to rescuing large insolvent companies,
companies whose uncontrolled defaulting would create a
domino effect by far critical for the national
economic system
Special Administrationfor Large Insolvent Companies
Despite the fact that Decree No 344/2003 was urged by the contingent situation, the Parmalat Decree has some undeniable qualities permitting the preservation of company's trading position:
Facilitating a swift procedure for the large
insolvent company in distress.
Facilitating a large insolvent company's rapid fresh
start.
Allowing an effective restructuring process of all
the entire group.
The Alitalia DecreeLegislative Decree No134/2008
The Alitalia Decree extended the SALIC even to serious
corporate failures lacking of a realistic rescuing
plan. This novelization set as well that the
restructuring plan could also consist in a simple
transfer of business assets
The Alitalia Decree
Creation of two companies a good one and a bad one
Exceptional exemption from antitrust conditions for
merger transactions.
Merger dictated by Politics
In the Alitalia case it is visible how the SALIC
procedure has lost its main aim and has been used for
a political bailout.
The Alitalia DecreeConclusionsCAI took the best assets from the 'old Alitalia' which at the end remains an empty box covered with debts.
The company was lacking of any chance of surviving,
it was not possible to organize a business plan capable of creating a financial equilibrium.
Alitalia created huge debts for the Country budget, just because it was treated not like an economic case but as political case
Parmalat DecreeConclusions
The Parmalat case can be taken as an example for best
practice in restructuring; Parmalat Special
Administrator Mr. Enrico Bondi helped the company go
across very troubled times almost safely .Composition
plan was not 'idyllic' creditors lost a relevant part
of their credits, but without being completely
deprived.
Parmalat Conclusions
Parmalat is still under SALIC procedure, nevertheless today it is still a company with a global presence, with more than 36,000 employees all around the world.
Bardzo Dziękuję za uwagę!
Bardzo Dziękuję za uwagę!
UNIONE EUROPEA REPUBBLICA ITALIANA REGIONE AUTONOMA DELLA SARDEGNA
Author’s research is supported by the Autonomic Region of Sardinia
PO Sardegna FSE 2007-2013. L.R.7/2007
“Scientific research and innovation technology promotion in Sardinia”
Contact:
Luigi Lai
Project page www.euroinsolvency.eu
Personal page
www.luigilai.it
