giovanni abruzzo

Giovanni Abruzzo

If the Prodi act (n. 95 April 3rd 1979) established some benefits for business or firms in troubles, more often - as we have seen it the past issue - it has allowed trespassing upon the basic rights of employees, as in the case of the Bolognese manager who must appeal to the European Court for man rights to safeguard his patrimonial rights.

To deepen this topic, so wide and complex, we have required an opinion to the attorney Giuseppe Celona of Milan who deals with communitarian and competition right.

Which way must the properties of a company be divided under a bankruptcy law?

The Civil Code (articles 2745 and follows), enforces order on privileges first. The law grants the privilege in order to the cause of the credit. Inside each class, all creditors must be managed the same way, that's why it is talk about “par condicio creditorum”. From the sale of the properties of a company, a certain amount is made and unbiased divided into employees. If the company continued the activity, it must pay the debts contracted first.

Why the bankruptcy law is today deemed as a special law? Which are the rules?

Its system moves away from the common law in order to the special requirements of the disciplined matter. To say it easier, starting from the moment the company goes bankrupt, single creditors cannot get ahead their own legal action, they have only the right to get their expenditures be acknowledged over the distrained properties falling under the bankruptcy. “Distrained property” means the property subjected to a bond and that cannot be either sold or handed over but on court provision.

Getting back to the Prodi act, we dealt with, this law has subverted the jurisprudence on bankruptcy since it blocks the previous credits. Is it right all that?

First it must make a distinction between the Prodi act and bankruptcy. Within the special administration (in fact coming before a company goes bankrupt), the company organs continue in office. Instead, when a company goes in bankruptcy it losses its legal capacity, and so there is the control both by a committee and the Ministry of the Industry. In practice the Prodi act has only extended the agony of a firm.

Why so often some employees' credits are paid off and not other's ones?

Still for the same privileges. If some creditors are employees or social security bodies, while others are simply suppliers, the formers have an edge over the latter.

Is it possible that a firm, as in the case of the employee of the firm Fochi of Bologna, does not pay off him and instead liquidates a supplier or other creditors? Who decides? The receivers?

If the firm is under special administration, the receivers decide. Before going bankrupt the firm itself makes a list of creditors that will be deposited in court. From now on the entitlement of payments will be by court's determination.

What happens instead in the case of a company under receivership?
Even this case the “par condicio creditorum” must be followed?

Under the receivership, payments are suspended and the several execution actions become individual actions. It concerns an expedient to put in order the affaires of firm temporarily in trouble.

What about the special administration?

As I've said it was started with the Prodi act and it was useful to put right firms in troubles, so also the business relations.

Since few months the Prodi act is “retired”. What's about the current situation?

It's few changed. Firms in trouble go on following the same juridical procedure and in case of bankruptcy they sell their properties to close the existing procedures.

We ask the attorney Micolano of Bologna what does it change after having taken into examinatio the case of the employee of the firm of Bologna due to the rulings of the Court of Justice of Strasbourg?

Even if censuring the behavior of Italy, the Court for the time being has only taken into examination the motives of the appeal under the aspect of the right of the employee to take legal action in order to safeguard his interests.
On its side the Italian government has justified itself by advancing the fact that the petitioner must first submit his economic demand to the loss adjuster and then he must contest the passive state in a civil court, after the bailment at office of the clerk of the court. When the verdict of Strasbourg will be definitive the employee will have the right to a further amount of money by way of depreciation and the Italian State will be condemned to pay a penalty from 20 to 50 millions, besides the legal costs.

What does it change for the businesses that have benefit from the Prodi act?

Unfortunately the business that have benefit from the law during the last years it does not change anything, since they must follow the usual procedure.
The new law, on force from last August, foresees a greater safeguard both for business and employees.

From the par condicio to the effects of bankruptcy

It remains to underline that, by examining the law 267 of 1942, the bankruptcy was essentially prompted over the principles of a liberal economy as it considered unsuitable the insolvent business to perform its role: by this point of view the exit of the business from the market by the means of its winding up achieved the target to give creditors a fit safeguard by the means of the “par condicio creditorum”.
This idea, superseded for someone already at the time when the bankruptcy law went in force, must reckon now with a different economy and especially when other interests of businesses are coming in the foreground.
All that finds its corroboration in the Prodi act (n. 95 - 1979) that introduced some evolutionary aspects featuring the current bankruptcy proceedings law, wherein the achievement of the “par condicio creditorum” is time by time differently applied in base of priorities.
The nature of the previous debts is weakened in force of interests not always coinciding with the creditors' ones.