martedì, Aprile 16, 2024
Diritto e Impresa

European and U.S. approaches to business failure and insolvency

a cura della Dott.ssa Elena Terrizzi

1. Reasons for a comparative analysis between European and U.S. approaches

Due to the previous economic-crisis, many jurisdictions have strengthened the need to introduce a set of effective corporate rescue systems given that, in a market economy, corporate failure shall be considered as a physiological event, not necessarily characterized by a juridical disfunction related to its management. In this sense, the crisis faced by the company shall be linked to the fact that, in a competitive market, the entrepreneur might have been properly “defeated” by its competitors, which, perhaps, have carried out their business in a more efficient way.

In this view, it is interesting to note – and to compare – how different jurisdictions have embraced the evolution of bankruptcy law objectives, given the worldwide effects which stem from the exercise of business activities. There is no doubt that, particularly in Europe, the actual tendency is focused on the second-chance culture which has been reinforced through the introduction of rescue-oriented reforms.

The decision to compare different legal systems (in particular Italy, France and the United States) is based on the significant influence that some jurisdictions have exercised towards new corporate governance mechanisms which, in some cases, have led to the introduction of relevant reforms. For instance, the 2005 French reform[1] and especially the enactment of its safeguard procedure, might be deemed as signals of  the legislator’s tendency to encourage early intervention. Nowadays, evidence shows that this seems to be the path followed also by the recent Italian reforms. Indeed, the Italian experience has demonstrated that entrepreneurs tend to see the warning signs of a crisis as an episode that can be underestimated or interpreted in a different way, but rarely as an alarming situation which may lead the company’s condition to worsen. In other words, optimism represents an “innate gift to those who exercise business activities”[2], but, on the other hand, there is no doubt that a chronic tendency to underestimate the negative signals of a crisis consists in an act of management irresponsibility. Hence the need to pay due attention not only to the classical and manifested signs of financial crisis (such as the block of the credit lines or even their revocation), but also to the so-called Early Warnings Signs[3].

The following analysis will show how different jurisdictions may share interconnections regarding specific legal issues, this being true not only when comparing the experiences among Member States but also when considering some non-EU approaches. For instance, the American Chapter 11 is deemed to represent the leading model that has placed the basis for the Italian and French reforms. For these reasons, a legal comparison may help the evaluation of strengths and weaknesses linked to mechanisms which have already been enhanced in different jurisdictions.

2. The influence of the French Procèdure d’Alerte on the new Italian Crisis Code

The new Italian Crisis Code (introduced by Legislative Decree 2019, n. 14) establishes new principles on the entrepreneurial crisis and insolvency. One of its greatest features concerns the introduction of an “alert procedure”, mainly inspired by the French model[4]. The legal system introduced in France through the 2005 Law reform was aimed at improving the efficiency of pre-insolvency mechanisms, the effectiveness of rescue plans and a faster liquidation procedure. Advancing in time, the law has been amended in order to increase the attractiveness of safeguard procedures aimed at rescuing the distressed companies. Remarkably, this result has been chased through the introduction of mechanisms which require debtors to become aware of their corporate financial difficulties at an early stage, so that they can promptly intervene to recover the firm. For these reasons, nowadays the French corporate rescue system is deemed to be very sophisticated and this may justify the interest of the Italian legislator towards it.

As a matter of fact, the “reformed” Italian Bankruptcy Law states a special preference for those solutions which promote the continuation of the business activity, with the aim to preserve the value of the production plants. These considerations have led to the enhancement of what is usually conveniently defined as the “bankruptcy unrelated law”, which might be applied to businesses in distress[5]. According to this principle, it seems that nowadays means of contractual management for businesses shall be fostered in order to overcome the financial difficulties that a company may face while exercising its activity. Following this path, the new Italian Crisis Code plays a pivotal role regarding its effects on corporate governance, with the introduction of “renewed” duties and liabilities to management and control bodies in distressed enterprises.

Through the introduction of the so-called alert and crisis composition procedure”, a mechanism aimed at preventing the insolvency of distressed companies has been thus adopted, taking inspiration from the pre-existing reorganization measures of different jurisdictions. The importance of a prompt intervention has been remarkably stressed, given the common belief that effective restructuring processes must be enforced before the enterprise actually becomes insolvent – in other words, before not being able to pay its debts as they fall due.

Considering these influences, there is no doubt that the introduction of the new Italian alert procedure drew inspiration from the French Procèdure d’Alerte[6], but, as one might expect, its legal transplant has represented a complex operation.

First – before entering a more detailed analysis of the two mechanisms – it might seem important to stress a remarkable difference in the nature of these pre-insolvency proceedings. This aim might be satisfied through the comparison between the role of the President of the Tribunal de Commerce in France and the Crisis Composition Body in Italy. Indeed, the former represents a judicial body unique to the French system to which the law attributes the power to convene the management of any enterprises about which there is information of distress, capable of prejudicing the continuation of their business activities. On the other hand, the Italian provisions require the introduction of a “Body” that will be set up – from the scratch –  at each Chamber of Commerce and helped by the contribution of three experts.

The role of these authorities will be later discussed in more detail, but, for the purpose of this opening analysis, it seems important to stress that the Italian system is intended to exclude any judicial nature of the pre-insolvency mechanisms[7]. Adopting this decision, the Italian legislator has considered that, if the court was involved, the debtor could have opposed more resistance to the use of these mechanisms, considering the court’s intervention as a first signal towards a judicial liquidation. According to the alleged negative influence that the judicial authority may exercise towards a distressed – but not yet insolvent – enterprise, an interesting UNCITRAL report stated that “there is a possibility that directors seeking to avoid liability will prematurely close a viable business which otherwise could have survived, instead of attempting to trade out of the company’s difficulties”[8].

From a different viewpoint – unlike the French model – the new Italian Crisis Code attributes competences towards several institutions, thus increasing the uncertainty and complexity of procedures which, instead, should have been aimed at implementing promptness and confidence in favor of the debtor.

3. Alert and Crisis composition procedure: the role of Governance Bodies

The renewed approach to corporate governance is highlighted in the decision undertaken by the Italian legislator to confer a particular power to commence the alert procedure, among other parties, also to supervisory bodies and auditors. The identification of pre-insolvency representatives, indeed, plays a remarkable role for an efficient implementation of the examined provisions, considering the powers they exercise over debtors and their assets, as well as the need to grant creditors’ interests. Following this principle, it is necessary for the parties entitled to commence the alert composition procedure to be appropriately qualified and to have the knowledge and experience that will ensure effective application of the law. Therefore, according to the new provision, the alert and crisis composition procedure may be started by the debtor, its supervisory bodies or qualified public creditors[9].

One of the risks that shall be taken into account while considering the commencement of an early alert procedure is represented by the possibility that, in case of failure to respect debt restructuring plans or arrangements with the creditors, the company would enter into a judicial liquidation. Therefore, the new provision requires the supervisory body or the auditors to take initiatives when they detect specific clues of financial difficulties. However, with a clear intent not to entirely deprive the management of its powers, these authorities (the supervisory body and auditors) must immediately inform the directors of the emerged evidence. In other words, the initiatives aimed at identifying the adequate measures for debtors in connection with the prompt commencement of the alert procedure must be enhanced after a discussion with the management.

In this context, the Crisis Composition Body may be deemed as an authority in the middle between the party who commences the alert procedure and the judicial authority, thus highlighting the private nature of this mechanism. The new entity, once the notification from either the debtor or the qualified creditor has been received, is required to call the debtor (and, if existent, the supervisory body) for a confidential meeting, in order to assess the initiatives undertaken by the management with the aim to overcome the financial crisis.

The participation of governance bodies in the internal phase of the alert procedure might, therefore, be activated by the communication disposed by the supervisory body or auditors. Granting a certain autonomy towards the management bodies, three different outcomes may result from the reception of the notice. First, the governance bodies may promptly intervene in order to adopt reasonable measures aimed at overcoming the emerging difficulties. In this case, it is important for the management to carefully analyze the situation and the measures that shall be undertaken, avoiding a worthless waste of resources in cases where a rescue intervention may already be too late.

Indeed, the detection of the crisis at a preliminary stage can enable to successfully enforce the least intrusive instrument (certified recovery plan), which gives way to the restructuring agreement (accordo di ristrutturazione) whenever cuts in the debt or requests of new financing are planned[10].

As a second solution, it would be possible for the management to consider some potential measures with the intent to further implement them. Even in this case, however, it is necessary to consider the adequacy of such instruments and, for these reasons, a monitoring power is attributed towards the supervisory board. Therefore, the draft of a reasoned report by the management containing the assessment of these measures’ adequacy would better grant the effective application of the procedure, both with the attribution of monitoring powers towards the supervisory body. Moreover, the introduction of a deadline in the notice triggering the governance bodies’ intervention would be helpful to reduce the amount of time within which these bodies are required to act. On the contrary, excessive rigid requirements posed upon the management would not be deemed as fair, given the exemption from joint liability recognized towards the statutory auditors pursuant to art. 14, par. 3 of the new Italian Crisis Code.

Lastly, the third outcome may be represented by the simple inactivity of the internal bodies. In this circumstance, absent a collaboration from the management, the alert procedure may be commenced by the company’s supervisory bodies or by the company’s statutory or independent auditors (whether they have been appointed). Therefore, the supervisory bodies are required to act immediately, being the prompt commencement of the procedure also incentivized by the application of either sanctions or rewards. However, given the fact that this procedure is also applicable to small companies that may lack any supervisory body, the prompt intervention of the management  shall be deemed as the most effective – or at least a more plausible – solution.

Comparing the Italian experience with the French model, a first difference could be found in the fact that, according to the latter, the application of the procedure differs depending on the type of company which is considered (specifically sociètès anonymes and other types of companies[11]). In any case, a leading role is played by the so-called commissaires aux comptes (CAC) which are given powers to detect the crisis and to alert the management, thus recognizing the central position of the directors and shareholders in the continuation of the procedure. Furthermore, the intention of the French legislator to promote the internal resolution of the crisis is showed by its decision to limit the intervention of the external authority (the President of the Tribunal de Commerce) only to cases where adequate measures have not been internally undertaken.

A comparison may be therefore found between the role attributed towards the French commissaires aux comptes and the Italian supervisory body. The former, as well as the latter, is required to immediately inform the management body of any sign of difficulty. A specific timeline is then stated in the French provision for the internal body to intervene: within fifteen days after the reception of the communication, a plan aimed at business continuity must be prepared; moreover, in cases where the CAC invite the management body to express an opinion, the latter is called to pass a resolution within eight days of the above-mentioned invitation[12]. The commissaires aux comptes are also given the power to ask directors to call a general meeting of the shareholders, especially when the economic conditions of the enterprise seem to worsen[13]. In cases where a negative outcome results from the meeting, the CAC shall notify the distressed condition of the company to the Tribunal du Commerce.

The above-analyzed procedure applies to sociètès anonymes, while a slight difference can be pointed out when other types of companies are involved. In this latter case, the President of the Tribunal de Commerce plays a leading role since the beginning of the procedure, given his power to ask for information about the company’s conditions. However, even in this circumstance, the CAC are required to inform the management body of the discovered evidence, thus fostering its prompt intervention. Lacking a positive and effective reaction of the management, the commissaires aux comptes are required to convene a general meeting and to inform the President of the Tribunal de Commerce[14].

In conclusion, it is now possible to state the difference between the role of the Italian Crisis Composition Body and the French President of the Tribunal de Commerce. According to the Italian experience, the setting up of ad hoc Bodies at the Chamber of Commerce represents the establishment of an entirely new entity – to be created from the scratch – which requires the appointment of professionals qualified to perform the role of the Board of Experts. Once the procedure has been brought before the Body, the debtor can no longer autonomously sign agreements with the creditors in order to conclude the procedure before it ends. Therefore, the Organismo di Composizione della Crisi (Crisis Composition Body) and the Board of Experts represent the only authorities required to assess the adequacy of the adopted measures and the existence of relevant positive developments in negotiations. Otherwise, the declaration of insolvency will be the only alternative for the company. It must also be noticed that the Body has no power to receive information from the registry office, neither to commence the crisis composition procedure, being the initiative of the competent parties necessary. Moreover, the Organismo di Composizione della Crisi does not exercise any judicial function and thus the effectiveness of its performance relies on the ability of this body to further become authoritative and reliable.

On the contrary, the French model is based upon the special expertise in the prevention of corporate difficulties which is attributed towards the President of the Tribunal de Commerce. This judicial authority plays a pivotal role in collecting the necessary information which may trigger the convocation of a meeting with the managers of the distressed companies. From the analysis of the powers conferred upon the President, it is interesting to notice that, during the meetings, he is not required – and neither allowed – to substitute the management. In particular, the authority is simply asked to converse with the internal bodies in order to remind them their obligations under the law and, eventually, to take note of the measures undertaken to overcome the situation of economic difficulty. The appointment of ad hoc agents, with the aim to help the company in finding a common solution with the creditors, may intervene only in cases where the debtor is not able to fulfill its obligations and to overcome the ongoing financial crisis. Furthermore, if the debtor stops his payments, the President must inform the Ministère Public (Public Prosecutor) and a redressement judiciare or liquidation judiciare[15] shall be commenced.

Following this analysis, the primary role of the President consists in the collection of all the relevant information regarding the “likelihood” of a financial distress for the company and the communication with the management aimed at fostering its prompt intervention. This latter principle may be deemed as the successful key of the French model, which is based on the protection of the procedure’s confidentiality, that helps the internal bodies to undertake appropriate actions without necessarily jeopardizing the business reputation.

In conclusion, according to the above-discussed new Italian alert procedure, the internal governance bodies – instead of an external judicial authority –  seem to have acquired a leading position in determining the future of the company.

4. The transition from corporate governance to (pre-)insolvency governance

The pivotal role attributed towards internal governance bodies might be better understood when considering the transition from corporate governance to (pre-) insolvency governance.

First, corporate governance may be defined as “the system by which companies are directed and controlled”[16], which involves a set of relationships between the management, its shareholders and other stakeholders[17]. In the attempt to clarify the importance of an efficient corporate functioning over the prevention of insolvency risk, we shall start from a simple assumption: directors play a critical role to the lives of the firms in managing their business activities, and perhaps even more when a company is in financial difficulty.

Nowadays there is no doubt that effective pre-insolvency and creditors’ expectations represent a pivotal element of financial stability. Therefore, this circumstance justifies the interest in introducing the operational changes (if any) which characterize the transition from corporate governance to “(pre-) insolvency” governance.

Directors’ liability towards company, creditors and third parties – based upon the non-fulfillment of specific duties stated by the law (and the statutes) or the breach of general duties concerning diligence and loyalty – assumes a more defined role in the specific circumstance of a corporate crisis. A reason behind this assumption can be found in the fact that in cases of crisis, the duty of diligence (art. 2392, par. 1 of the Civil Code) is more evident in the nature of the powers and specific competences attributed towards the managers.

When a financial distress occurs, a peculiar function is to be attributed to the assessment of the organizational, administrative and accounting structures’ adequacy (art. 2086, par. 2 of the Crisis Code). Moreover, a cautious check must be done when considering the opportunity for a judicial intervention to be activated, given that this might be in contrast with the principle introduced by the business judgement  rule, more focused on the need to assess the outcome derived from the management results in lack of duties’ violations. For these reasons, a control upon such managerial choices shall be precluded to the judge, which is required to have a qualified technical-juridical competence, but also to be aware of his limits of intervention.

When the company faces a period of crisis, the directors are exposed to a liability which is of crucial delicacy, given the more troubled managerial effort derived from the choices which have been or will be undertaken in the attempt to find an adequate solution. Moreover, when a cause of dissolution (causa di scioglimento) has been triggered, the duty of conservative management (gestione conservativa) raises upon the administrators. In this sense, the alleged duty to preserve the integrity of the assets might interfere with the possibility to find solutions for the business recovery, which are mainly characterized by the continuation of the entrepreneurial – and thus risky – activity. It is interesting to note that, according to some scholars, the duty to preserve the integrity of the assets (art. 2394, par. 1) is one of remarkable importance in the field of creditors’ protection. Indeed,  although an action for liability could only be brought before the court when the capital turns out to be inadequate for the credit’s satisfaction, some authors believe that the duty to preserve the assets shall bind the directors in every phase of the business activity, independently from the existence of the above-mentioned objective prerequisite, the likelihood of insolvency and any possible cause of dissolution[18].

In cases where directors caused harm or worsened the state of crisis, a decisive impact is played by the (non-) fulfillment of the duty to set up an adequate organizational, administrative and accounting structure proportional to the company nature and dimension (art. 2086, par. 2 of the Civil Code). Moreover, in the view of the reform, the duty to provide adequate organizational mechanisms (“istituire assetti organizzativi adeguati”) assumes a more relevant function when considered in connection to the prompt identification of the crisis and the loss of going concern (“rilevazione tempestiva della crisi e della perdita della continuità aziendale”). Equal importance is recognized towards the prompt adoption of those instruments provided by the law in order to overcome the crisis and to restore the business continuity.

Therefore, directors are required to constantly monitor the conditions of the company for a prompt understanding of the symptoms and the diligent adoption of  adequate remedies. From a juridical perspective, managers are required to convene, without delay (senza indugio), the general meeting in cases where relevant losses – more than one third of the capital – have been faced by the company, in order for the opportune measures to be undertaken (articles 2446 and 2482-bis of the Civil Code). More specifically, when the loss causes the capital to fall below the minimum stated by the law, the duty to convene the general meeting is aimed at voting either upon the capital reduction and its contemporary raise above the minimum, or the company transformation (articles 2447 and 2482-ter of the Civil Code). On the other hand, from an economic perspective, the existence of a crisis requires the directors to carefully analyze the possibility for the company to continue its business activity, which, as in the arrangement with creditors (concordato preventivo), might waive the duty of conservative management. For these reasons, the tardive perception of the alarming symptoms recalls, in the perspective of the reform, the adoption of crisis-alert systems, in order for the directors to undertake immediate measures to minimize the losses and to avoid insolvency.

Interestingly, some authors have argued that the above-mentioned duties represent nothing more than “general” principles of correct business and entrepreneurial management (“principi di corretta gestione societaria e imprenditoriale”, according to art. 2497, par. 1 of the Civil Code), thus excluding the existence of a specific and different “crisis-alert liability”. Nonetheless, the Italian reform must be recognized the merit of having set a more clear and defined attribution of competences among the internal governance bodies.

Following this analysis, the aim of the transition from corporate governance to “bankruptcy governance” should be that of preventing managerial opportunism, balancing creditors’ prerogative on the debtor company assets. Therefore, the corporate governance structure should be replaced by the (pre-)insolvency governance system as soon as the financial condition of the company reaches a state where it is more likely than not that the company will be unable to generate sufficient cash flows to pay back its debts as they fall due.

5. The U.S system: Bankruptcy Code

At this point, it might seem interesting to introduce some comparative legal insights between the above-discussed EU approaches and the U.S. system. The Bankruptcy Code[19] includes a series of Bankruptcy procedures among which Chapter 7 and Chapter 11 represent the main cornerstones. The former is aimed at the debtor’s asset liquidation, while the latter fosters its reorganization. As a first step it is worth noting that both procedures may be addressed to any “person”[20], notwithstanding the commercial, professional or personal nature of the debts[21], and they both encourage the discharge. Notably, the U.S. system recognizes a certain degree of discretion regarding the commencement of these procedures, given that – contrary to the EU approaches – there are not objective requirements stated by the law. For instance, in cases where the debtor voluntarily decides to apply for a bankruptcy procedure (voluntary petition), the company is not required to be insolvent[22]. In these cases, the absence of an objective requirement of insolvency has led the debtors to increase the use of the bankruptcy proceedings as business planning instruments. On the contrary, when the creditors demand the commencement of the procedure (involuntary petition), they must demonstrate that the debtor is “generally not paying [its] debts as such debts become due”[23]. In other words, insolvency must have occurred.

In order to facilitate the access towards a Chapter 11 bankruptcy, the Code includes a series of incentives for the debtor aimed at fostering its reorganization. First, as a general principle, Chapter 11 authorizes the managers to continue operating business (debtor in possession) and gives them the right to create a reorganization plan. This system is justified by the fact that the provisions do not state a duty to replace the debtor’s management. This means that the management represents the exclusive board which is required to consider the interests of shareholders, creditors and other stakeholders and to balance them according to the priorities established in the Code. However, according to this model, the debtor is held liable for the corporate management and performance as if it was a trustee (being the latter a third neutral and external party)[24].

Indeed, a valid – but uncommon – alternative to the debtor in possession control in Chapter 11 is represented by the appointment of such an external entity (trustee)[25]. The neutrality of this figure, and the fact that she is only responsible to the court, may help balancing the opposite interests better than management.

At the same time, it is necessary to consider that, contrary to the previous common EU approach, in the U.S. system bankruptcy has never been automatically associated with failure and inability of the management. From a general perspective, an order for relief [26] automatically stems from the commencement of the Chapter 11 procedure and consequently imposes an automatic stay (that is the suspension of executive actions and precautionary measures). Furthermore, the debtor is the only subject who can draw up a restructuring plan during the exclusivity period[27], regardless of the nature of the procedure (voluntary or involuntary).

From this first analysis, it is possible to understand that the U.S. Code attributes a remarkable control power towards the debtor given that he can decide to commence the procedure, still being in charge of the company, without any control exercised by an external authority. In general, Chapter 11 provides for a continuation of the business operation and a financial restructuring rather than liquidation. Following this principle, the Supreme Court[28] has stated that the aim of Chapter 11 is to “prevent a debtor from going into liquidation with an attendant loss of jobs and possible misuse of economic resources”.

In the past decades, many commentators have dismissed Chapter 11 as hopelessly flawed. The debtor in possession model has been considered problematic for corporate governance primarily because of the management’s conflict of interest. On the other hand, control mechanisms – such as the further-discussed creditors’ committees – are deemed to be weak and sometimes they are not even appointed or, however, ineffective. Lastly, it should not be underestimated the fact that the bankruptcy Court may exercise a strong power in some phases of the procedure through the appointment of professionals – such as the above-mentioned trustees and the examiners.

Recognizing the complexity of Chapter 11 bankruptcy procedure, the following analysis will focus on the role of the parties involved with the aim to examine the impact that the overall mechanism exercises towards corporate governance.

6. Chapter 11 and Bankruptcy Governance

Chapter 11 of the Code represents, in general, a legal tool providing a framework within which interested parties may negotiate solutions to the issues faced by a financially troubled company. A control power over the negotiation process is conferred to the pre-bankruptcy management of the business, according to the above-mentioned debtor in possession model. However, the implementation of good corporate governance does never represent a simple task and it is even more difficult in cases where a company faces a financial distress. In this circumstance, indeed, many different contrasting interests must be balanced and the “management’s control goes beyond day-to-day operational decisions to reach issues regarding fundamental changes in the asset and liability structure of the company”[29]. As a consequence, it shall be questioned whether the company’s management shall be deemed as having the skills and objectiveness to balance the competing interests.

On the one hand, the management of a bankrupt company, thanks to its previous day-to-day control over the company’s business, owns huge informational advantages. On the other hand, the board of directors is generally moved by the incentive to favor shareholders’ interests, given that it has been appointed by the shareholders themselves[30]. The need to implement a balanced system, in order to grant the different – and opposing – interests of the parties involved, exists inside Chapter 11, which provides a corporate governance structure aimed at monitoring the management’s actions during the reorganization process. Following this procedure, the management shall first take into account the possibility for the business assets to be better utilized in an efficient manner. For instance, this first step may help owners come to the conclusion that the business shall wind-up and liquidate. Secondly, the debtor’s management shall consider how the various interests involved in the procedure upon the business assets should – and could – be restructured.

To be clear, non-bankruptcy governance includes business operations made on behalf of the shareholders when the corporation is solvent[31]. In this circumstance, shareholders have the right to re-shape the composition of the management through the exercise of their voting rights, thus adopting ultimate decision-making power. The board of directors owes a duty of loyalty and a duty of care to the shareholders. The latter maintain a certain degree of discretion over several significant issues even if most of the shareholders’ decision-making authority is conferred to the management[32]. Thus, the relationship between managers and shareholders is based on the fiduciary model of corporate governance. On the other hand, creditors may influence the corporate governance system through specific means of contractual protection[33].

Interestingly, in cases where a slide towards insolvency occurs, creditors’ protection starts increasing through the implementation of  control devices which allow creditors to take the place of the shareholders in making pivotal decisions.

As the corporation approaches insolvency, the conflict between shareholders and creditors’ interests becomes more significant and the credit relationship starts changing as soon as the firm faces financial difficulties. Creditors obtain an opportunity to exercise a more extensive role in corporate decision-making, thus having the possibility to replace shareholders at the helm of the governance system. As a consequence, the extension of management’s fiduciary duties to both creditors and shareholders represents a fundamental principle of bankruptcy governance[34]. However, this places the management into a conflicting position because it is not unlikely for the interests of the various shareholders and creditors to be in conflict during the Chapter 11 procedure.

The difficulty of judging managerial discretion under the fiduciary standard has led to different scenarios. In the early years of Chapter 11, shareholders occupied the most influential role in bankruptcy proceedings. Nowadays, however, the creditors have obtained more power and influence.

Indeed, it has been argued by many scholars that, during the first years of Chapter 11 application, debtor’s management excessively dominated the procedure[35]. The existence of a conflict of interest was especially likely when the shareholders ran the company by themselves or in cases where they had related representatives on the board. However, in contrast with a situation where the firm is solvent, the shift toward crisis and insolvency increases the need to take into account creditors’ priorities through the adoption of specific measures which shall grant the fulfillment of the company’s obligations.

Therefore, while the debtor and its management seemed to dominate the bankruptcy proceeding few years ago, nowadays it has been argued that Chapter 11 has a remarkably creditor-oriented nature. This shift has occurred because the previous mechanism seemed to give too much control to the debtor’s managers, thus enabling them to completely decide over the future of the corporation and the interests of its creditors. Therefore, Chapter 11 is still formally debtor-oriented if considered from an international perspective, but there is no doubt that creditors now exercise a greater influence than before.

Although nowadays bankruptcy law does not  formally authorize creditors to appoint directors, the formers have increasingly implemented a de facto control, thus acquiring the power to shape corporate governance in Chapter 11. Creditors may exercise this power through two different strategies: on the one hand, they may threaten managers by requesting the court to appoint a trustee; on the other hand, the creditors could underline the fact that, after the reorganization process, they will take over the corporate assets, thus further subjecting the managers under their control.

A relevant effect that stems from the creditors’ new governance lever is represented by the encouragement towards management to file for bankruptcy in cases where a company faces a troubled financial period. On the contrary, the management would be attracted by the possibility to delay as long as possible the commencement of the procedure and to destroy the assets value as they underestimate the inevitable consequences of the crisis. Thus, over the last three decades, creditors have become more sophisticated actors in cases where a bankruptcy procedure has been commenced. Moreover, their power to appoint a chief restructuring officer before the filing for bankruptcy exercises a decisive influence towards the management both before and in bankruptcy. Therefore, the positive impact of creditors’ dominance over corporate governance relaxes the conflict of interest which stems from a debtor-oriented model. On the other side, a strong creditors’ influence may also weaken corporate governance. The power exercised by major creditors, especially when it comes to vote on the reorganization plan, may negatively affect management’s decisions in the attempt to favor these investors and a conflict of interest is likely to exist also between larger creditors.

In Chapter 11 cases, the monitoring powers conferred to creditors shall be mainly exercised through the so-called creditors’ committees. Such entities are allowed to appoint some advisors in order to conduct investigations about the debtor’s activities. However, it is not uncommon for a creditors’ committee not to even be appointed or, otherwise, to be completely inactive. Among the reasons which could justify this circumstance there is the fact that investigations are often very expensive and they might even delay the bankruptcy process; moreover, it has been noted that creditors are generally unwilling to exercise the role of members. Hence, the fact that creditors’ committees are not generally able to solve corporate governance problems is showed by the internal fights which contribute to render the work of these entities ineffective and time-consuming.

In conclusion, a common element in both debtor-oriented and creditor-oriented model seems to be the existence of information asymmetries and the managers’ lack of incentives aimed at satisfying the opposing interests of all the parties involved.

The above analysis has shown issues related to conflict of interests and agency problems which arise from many bankruptcy cases. Furthermore, the ineffective control over managers by both shareholders and creditors may result in a failure to maximize corporate assets value and the general corporate reorganization of the Code does not even seem to take into account the interests of non-owners. Moreover, there is a common belief that the intervention of a trustee might weaken (or better avoid) any residual control of the management over the corporation and consequently slow the entire bankruptcy proceeding. For these reasons, taking into account the ineffective power exercised by the above-mentioned creditors’ committees, some authors have considered the favorable impact that might come from the appointment of the so-called examiners[36]. The most significant benefit of this mechanism is represented by the fact that, contrary to the trustee, examiners do not replace the management. Therefore, through this system the courts can leave the management in operational control, thus benefiting from managerial continuity, while requiring an impartial third party to investigate matters according to the court’s decision and the scope of the mandate.

7. Conclusive remarks between (pre-) insolvency governance approaches

From the previous analysis, it seems that the need to implement a more effective compliance with Chapter 11 procedures could be satisfied by the appointment of a third external and neutral party, different from the trustee, which would increase the possibilities of good corporate governance – before and in bankruptcy – without the necessity to replace the debtor’s management. A similar role, with some remarkable differences, could be identified in the one attributed towards the Italian Organismo di Composizione della Crisi and to the French President of the Tribunal de Commerce, given that these authorities act as  third neutral parties aimed at helping the corporate management instead of replacing it.

However, for the aim of a conclusive comparative analysis regarding the current corporate governance structure and its functioning, we shall primarily focus on the  powers and duties attributed towards the internal bodies before and after insolvency has occurred.

The first main difference between the EU and U.S. approach can be seen in the existence, stated by the former, of objective prerequisites which may justify the commencement of  (pre-)insolvency procedures. Indeed, this principle does not represent a mandatory requirement for the activation of a Chapter 11 procedure (e.g. in case of a voluntary petition). Therefore, the existence of objective prerequisites in Member States, such as the Italian stato di crisi, triggers the emergence of specific duties posed upon the directors. This principle implies that adequate systems of corporate governance and internal control – but also risk management – shall be implemented in order for those duties to be effectively fulfilled. In this context, it can be said that the overall asset value might be “optimized” when a continuative and effective link between risk appetite and risk tolerance is put into practice.

In this sense, the reform first introduced with the Italian Crisis Code emphasizes the central role of the corporate governance, introducing a change in the discipline of art. 2086 of the Civil Code. According to the new provision, there is a specific duty for the directors and the internal bodies to set up adequate organizational structures for the prompt detection of the crisis, as well as the need to timely employ one of the instruments disciplined with the aim to restore the business continuity.

However, critics might be raised against the belief that approaching a state of crisis – or insolvency in the U.S. – makes it necessary for the directors to privilege the creditors’ interests, as it might emerge in the mechanism embodied by the Italian conservative management (gestione conservativa) and the American shift in duty principle. This is the opinion – not widely shared – of who considers that, according to the Italian system, a duty for the directors to preserve the business value does not automatically stem from the state of crisis in the absence of a formal (and thus typical) cause of dissolution (causa di scioglimento).

The above-mentioned issue finds its practical outcome in the need to avoid not only the directors’ tendency to underinvest, thus assuming excessively cautious behaviors, but also, the opposite and reckless decision to overinvest, with the intent to abuse of the company’s limited liability.

Following this principle, it seems that the managers shall be free to decide whether and how much risk to put into the business activities carried out until the last day of the company’s existence. A balance must be therefore found between the need to safeguard shareholders’ and creditors’ interests along with the necessity not to limit the reasonable business risk, being the latter in compliance with the principles of the business judgement rule.

In this way, the conservative management might be in contrast with the substantia rei of the entrepreneurial activity, which is physiologically risky in nature.  Therefore, a risk assessment implies the need to value the directors’ behavior in order to avoid the possibility that sanctions are applied to a (physiological) risk assumption and its consequent (physiological) business failure. Moreover, considering the criminal implications of this outcome, it should be preferable to endorse the thesis which requires a serious negligence (colpa grave) – and therefore not a mere untimely intervention – as the basis for the crime of simple bankruptcy (reato di bancarotta semplice) to be triggered.

This approach is more coherent with the experience adopted in several international jurisdictions, such as the Delaware system, where there is no doubt that the managers of a company, even when insolvency has occurred, do not have a specific duty to minimize the losses. According to this view, it can be said that in several jurisdictions, directors have been declared liable precisely because they chose not to take – reasonable – risk and thus to liquidate the society in bonis[37]. In this sense, the wrongful trading principle imposes the directors to decide (“moment of truth”), between two solutions: i) immediate liquidation of the assets, or ii) guarantee of a serious effort for an effective corporate restructuring. Therefore, the wrongful trading tends to discourage illegal abuses related to the company’s limited liability, fostering principles of correct management especially when the difficult economic conditions of the crisis have occurred.

Evidence of an approach oriented to a more independent role of the internal bodies might also be found in the fact that, according to the American system, the appointment of a trustee, and thus the replacement of the internal management, may occur only “for cause, including fraud, dishonesty, incompetence, or gross mismanagement of the affairs of the debtor by current management, either before or after the commencement of the case”[38]. As a consequence, the enforcement of the American fiduciary duty principle makes it more difficult to address the liability of the internal management[39]. This is also true when considering that the U.S. system does not impose the appointment of a supervisory body, unlike the systems adopted in compliance with the EU principles which, on the contrary, have recently emphasized its role and functions[40].

It is interesting to note that, when considering the discipline of Chapter 11, no mention is made towards the activation of any early alert-crisis system. This principle is consistent with the view of the Delaware Court, according to which the mere existence of a zone of insolvency does not trigger any shift in duty towards the corporate directors: only a state of insolvency requires the management to shift from a shareholder-dominated to the creditor-dominated model.

On the other hand, the difficulty to identify the specific moment at which the directors are required to enforce adequate measures aimed at overcoming a financial distress, has strengthened, in our legal system, the need to better define the condition of the Italian stato di crisi.

In conclusion, it is possible to state that as the company approaches insolvency, the U.S. system affects corporate governance through the application of the shift in duty principle (from shareholder-oriented to creditor-oriented). Following this path, in cases of insolvency, creditors are empowered to bring proceedings by way of derivative action against the directors who failed to act in respect of their interests.

On the other hand, the issue concerning a possible shift in liabilities must be separately discussed when talking about governance systems adopted by the Member States. It is clear that specific duties – thus not a general “shift” – raise when objective requirements stated by the national law are met, but it cannot as clearly be stated that the activation of an alert-crisis mechanisms triggers a new and particular “alert liability” (responsabilità d’allerta) different from the general civil liability (of the directors) disciplined by the Civil Code[41]. This means that, according to this view, managers shall not be obliged to change their management strategy when a crisis has occurred, neither when signals of the crisis have emerged. However, the existence of a stato di crisi imposes the management to take it into account and to show that they have diligently and rationally carried out the business activity, being a change in strategy, on a case-by-case assessment, not deemed as necessary.

Therefore, the activation of an alert procedure, in compliance with the EU approach, shall help the identification of the moment at which the liability of the management might be triggered, as well as the quantification of the harm suffered by the company and its creditors. On the other hand, the U.S. approach does not seem to recognize any role to such alert-mechanisms, till the point that, in some cases, it considers bankruptcy proceedings as business planning instruments. Evidence of this principle is clearly shown by the fact that an actual condition of insolvency – not its mere likelihood – is required in order for a shift in duty to be triggered.

Freedom to decide which actions must be undertaken in order to exercise the entrepreneurial activity, exempts the directors from liability when they demonstrate the rationality of their choice among a set of alternative possibilities. In this view, even the management inactivity, if specifically justified, might be deemed as not automatically triggering a civil liability. The point is that inactivity must be assessed from an ex ante perspective, thus considering the information that the managers had (or could have diligently obtained) at the moment the decision was taken, and not, on the contrary, when the consequences of those actions have occurred (ex post).

According to this view, the provisions concerning actions and omissions related to an alert-crisis procedure do not seem suitable to impose the directors a specific and different liability from the general principles stated by the Civil Code: a particular alert-crisis liability (responsabilità d’allerta) shall be in practice deemed as not existent. On the contrary, the Italian system seems to have increased the importance given towards internal control bodies, thus better shaping their competences, for the early detection of the signals of the crisis.

[1] Loi n. 2005-845 du 26 juillet 2005 de sauvegarde des entreprises, amending Book VI of the French Commercial Code. The text of the law is available at: cidTexte=JORFTEXT000000632645.

[2] F. MAROTTA, La gestione della crisi, in M. VIETTI,  and F. MAROTTA, and F. DI MARZIO, (a cura di) The Italian Change For Restructuring. Milano: Giuffrè, 2014, p. 261.

[3] Examples of Early Warnings Signs are: a) delays in presenting financial data, b) turnover in key areas, c) systematic deviations from the forecasts, d) increased exposure to suppliers, e) use of speculative financial transactions, f) loss of customers or orders, g) attacks by competitors, h) distrust of some creditors.

[4] Some scholars have stressed the positive impact that the introduction of early-warning mechanisms would bring in our legal system, also considering their compliance with some provisions stated in the Italian Constitution. This is the opinion supported by F. VASSALLI, La prevenzione delle crisi d’impresa: bilancio attuale nella legislazione italiana, proposta de jure condendo. Primi appunti, 2011, p. 293, according to which “Sull’argomento non credo di poter spendere alcuna motivazione del mio convincimento che è quello che le misure di allerta comunque configurate siano legittime per ordinamenti come il nostro e come quello francese ispirati entrambe a quanto è prescritto testualmente dall’art. 41, 2° e 3° co. della Costituzione. Diversa risulta ovviamente la concezione anglosassone, spagnola ed anche germanica”; a more cautious approach is the one endorsed by M. FABIANI, Misure di allarme per le crisi d’impresa, in Fall., 2004, p. 827, who states that in the absence of an opportune adjustment of the discipline, the mere legal transplant would represent a long shot (“riportare questa particolare esperienza nel nostro sistema senza opportuni adattamenti sarebbe una scommessa persa in partenza; viceversa il legislatore italiano può giocare questa scommessa se è in grado di coniugare la funzionalità di quel modello alla tradizione italiana”).

[5] This expression (that could be translated into “diritto non fallimentare della crisi d’impresa”) has been introduced by DI F. MARZIO, Il Diritto Negoziale Della Crisi d’Impresa, Milano: Giuffrè, 2011, p. 68. According to the author, the enhancement of contractual management instruments shall be considered as a profitable strategy which could also be taken into account when pursuing the reorganization of the company or even as a mean to prevent the situation of crisis.

[6] In particular, according to the 2005 reforms, three pre-insolvency mechanisms have been introduced: safeguard-preservation procedure (sauvegarde), the conciliation procedure (conciliation) and the mandate ad hoc.

[7] It cannot be ignored the reason why the French system, on the contrary, recognizes a specific and relevant power to the President of the Tribunal de Commerce. Indeed, the President might be, for instance, represented by a non-professional magistrate elected among top managers and entrepreneurs, thus assuring a specific competence of this subject over commercial matters. Therefore, the experience acquired with insolvency procedures and judicial functions concerning financial difficulties characterizes the protagonist of the French model.

[8] UNCITRAL Legislative Guide on Insolvency Law, Part four: Directors’ obligations in the period approaching insolvency, p. 6.

[9] This form of activation of the procedure has no equivalent in the French model. Examples of “qualified public investors” are Internal Revenue Service, social security bodies and tax collection agents. The intervention of these bodies is required by the law in cases of “persistent significant indebtedness”, being this amount determined in relation to the size of the company and the specific importance of tax or debts for social security contribution (in order to “determine the early and timely appearance of difficulties, in relation to all the companies subject to the procedures herein”). In cases where the debt is not paid within three months, the qualified creditors are required to commence an alert procedure, thus notifying the company’s supervisory bodies and the Crisis Composition Body established at the Chamber of Commerce.

[10]The choice between the restructuring agreement (accordo di ristrutturazione) and the arrangement (concordato in continuità) shall take into account two aspect: the need to preserve the market image of the enterprise and the need to achieve a rapid approval of the solution found. Therefore, through the restructuring agreement, on the one hand, there is a greater protection of the company’s image and brand on the market (e.g. the name remains unchanged, unlike in case of arrangement where mention that the company is under arrangement must be indicated); on the other hand, however, there is greater difficulty in reaching an agreement with the banks and other creditors, especially if they are broadly spread. The arrangement plays a worse impact on the market, but it is more likely to be approved – due to the positive value given towards the non-expression of the vote in the assembly of creditors.

[11] Art. L234-1 of the Code de Commerce disciplines the alert procedure for sociètès anonymes, while art. L234-2 regulates all the other types of companies.

[12] For an analytic description of the procedure that must be followed by the commissaires aux comptes see Art. R234-2 of the Code de Commerce.

[13] However, the CAC may suspend the procedure at any time, according to the adequacy of measures eventually undertaken by the internal body. At the same time, the procedure can be re-opened when the internal effort is deemed not to be sufficient. This latter circumstance requires that no more than six months have passed from the date at which the first note has been sent to the management.

[14] Commissaires aux comptes are entitled of the right/duty to start the early-warning procedure (diritto/dovere di allarme) when lack of continuitè de exploitation has occurred. Therefore, in the French system, these subjects not only have a duty to start the procedure, but they are also held liable for the damages caused by an alert procedure whenever the latter has been commenced only with the aim to compromise the company. Liability also raises towards the company and third parties for the harmful consequences stemming from the negligent exercise of their functions. Among the reasons which may trigger the Commissaires aux comptes’ liability, “nell’ipotesi omissiva di allarme, di attivazione tardiva, e nell’ipotesi di negligenza od imprudenza allorché un controllore non sia in grado di rilevare gli indici di difficoltà di cui avrebbe dovuto essere a conoscenza”, quoting G. CARMELLINO, Una prospettiva d’oltrape: la procèdure d’alert ed il libro VI del codice di commercio francese, in Annali dell’Università degli Studi del Molise, 2013, p. 385. However, the above-mentioned liability does not raise in cases where the shareholders know about the irreversible state of crisis but still they do not intervene in order to avoid more prejudicial consequences (Sent. Cass. Com. 3rd March 2004).

[15] These procedures are disciplined respectively under art. L631-3-1 (redressement judiciare) and art. L640-3 (liquidation judiciare) of the Code de Commerce.

[16] Cadbury Committee Report, Financial Aspects of Corporate Governance (1992), §2.5.

[17] OECD Principles of Corporate Governance (1999), preamble.

[18] “Più precisamente, nell’esercizio della funzione gestoria occorre considerare che le risorse sociali sono funzionali (non solo a garantire un ritorno economico all’investimento dei soci, ma) anche a pagare i debiti contratti. Ciò implica che, al fine di massimizzare i vantaggi per i soci […] costoro non possono traslare (eccessivamente) il rischio d’impresa sui creditori. […] tale vincolo si applica in qualunque circostanza e, quindi, indipendentemente dalla particolare condizione in cui versa l’impresa societaria”, quoting A. M. LUCIANO, La gestione della s.p.a. nella crisi pre-concorsuale, Milano: Giuffrè Editore, 2016, p. 68.

[19] Herein after, the Code.

[20] Under §101.41 of the Bankruptcy Code, “the term person includes individual, partnership, and corporations». Interestingly, the new provisions have helped the abandon of the “bankruptcy stigma”, promoting the spread of a “cultural revolution […] that emphasized personal fulfillment and largely rejected personal responsibility [to the point that] financial failure became viewed as more the result of external factors, such as recession, inflation, lack of welfare, and lender’s conduct”. See R. EFRAT, Bankruptcy stigma: Plausible causes for shifting norms, in 22 Emory Bankr. Dev. J., 2005-2006, p. 518. This view is shared also by some Italian scholars.

[21] However, some specific exemptions must be taken into account. For instance, procedures regarding banks and insurance companies are disciplined under ad hoc provisions, not included in the U.S Code; moreover, Chapter 12 applies to “family farmers” and “family fishermen” while Chapter 9 deals with municipalities’ distresses. In conclusion, Chapter 13 disciplines an exclusive reorganization process for “individuals”.

[22] Following this principle, the debtor is not required to show evidence of insolvency, neither is he requested to wait for a certain amount of days before starting the proceeding (as it is, on the contrary, required in the French system). This approach has been criticized by C.G. CASE A short summary of chapter 11 of the United States Bankruptcy Code, in Nuovo diritto delle società, 2010, pp. 42-67, who stressed the consequential absence of any pre-bankruptcy investigation (istruttoria prefallimentare) and of the prompt initiation of the procedure through the deposit of a formal petition. This view is also shared by M. BRADLEY and M. ROSENZWEIG, The Untenable case for Chapter 11, in 101 Yale Law Journal, 1991-1992, pp. 1044-1045, who underlined the possible drawbacks of attributing an unsupervised power towards the debtor during a Chapter 11 procedure. In their view, there are “powerful incentives [for managers] to pursue bankruptcy reorganization”, given the fact that under this procedure the debtor is safe from the creditors’ executive actions.

[23] See §303, lett h), n. 1 of the Bankruptcy Code.

[24] This principle is in compliance with the opinion stated by the Supreme Court, according to which: “the appointment or election of a trustee occurs only in a small number of cases. Generally, the debtor, as “debtor in possession”, operates the business and performs many of the functions that a trustee performs in cases under other chapters. 11 U.S.C. §1107(a) […]. Section 1107 of the Bankruptcy Code places the debtor in possession in the position of a fiduciary, with the rights and powers of a chapter 11 trustee, and it requires the debtor to perform of all but the investigative functions and duties of a trustee”. See

[25] A trustee is a neutral administrator accountable only to the bankruptcy court who can only be appointed following the request of the parties involved. §1104 of the Bankruptcy Code states that the appointment may occur only “for cause, including fraud, dishonesty, incompetence, or gross mismanagement of the affairs of the debtor by current management, either before or after the commencement of the case”.

[26] The Bankruptcy Code enables a debtor to obtain a discharge from all debts as the order for relief has been enhanced. A voluntary petition represents an order for relief.

[27] 11 U.S. Code §1121, lett b):”[..] Except as otherwise provided in this section, only the debtor may file a plan until after 120 days after the date of the order for relief under this chapter”. As the exclusivity period becomes due, creditors are legitimated to file a competing plan. According to the Supreme Court of the United States, “the creditors’ right to file a competing plan provides incentive for the debtor to file a plan within the exclusivity period and acts as a check on excessive delay in the case” (see .

[28] See NLRB v. Bildisco & Bildisco, 465 U.S. 1983, p. 528.

[29] C. W. FROST, Running the Asylum: Governance Problems in Bankruptcy Reorganizations, in 34 Arizona Law Review 89, 1992, p. 90.

[30] In the court’s view the appointment of the management is disciplined under the (state) corporate law instead of (federal) bankruptcy law. In re J.P. Linahan, Inc. 111 F, 2d at 592, “[T]he right of the majority of stockholders to be represented by directors of their own choice and thus to control corporate policy is paramount and will not be disturbed unless a clear case of abuse is made out. This has been the rule all along in equity receivership, in ordinary bankruptcy and in proceedings for reorganization under former section 77B of the Bankruptcy Act 11, U.S.C.A. §207, where the corporate property was in control of receivers or trustees”.

[31] The term “solvency” is here used to consider the amount of the corporation’s assets value in comparison to its liabilities. Therefore, solvency exists when the assets value exceeds the amount of liabilities. On the contrary, when the amount of liabilities exceeds the value of the assets, the corporation will be deemed as “insolvent”.

[32] According to Delaware General Corporation Law §251, shareholders maintain discretion over fundamental changes in the corporation, such as mergers, the sale of all of the assets of the corporation (§271) and changes to the articles of incorporation (§109).

[33] The variables covered include those relating to mortgages, floating charges, financial collateral and retention of title clauses, insolvency set-off clauses which strengthen secured creditors’ interests, etc.

[34] “[T]he willingness of court to leave debtors in possession is premised upon an assurance that the officers and managing employees can be depended upon to carry out the fiduciary duties of a trustee”, quoting Wolf v. Weinstein (1963) 372 U.S. pp. 633, 651.

[35] For instance, see E. S. ADAMS, Governance in Chapter 11 Reorganizations: Reducing Costs, Improving Results, 73 in Boston University Law Review, 1993, pp. 581, 598-99. According to the author’s opinion, debtor’s management should not be allowed to make bankruptcy decisions.

[36] The appointment of an examiner is disciplined in §1104(c) and can be considered as an alternative to the appointment of a bankruptcy trustee. However, some scholars have recognized that the appointment of such authority is more common in cases where enterprises of huge dimensions are involved. See, F. MARELLI, Aspetti della liquidazione nella procedura di «riorganizzazione» prevista dal Capitolo 11 del Bankruptcy Code degli Stati Uniti, in Riv. Trim. dir. proc. civ. , 1995, p. 839.

[37] For instance, see Continental Assurance Co. of London Plc case (April 2001) where the English High Court held that directors that had kept the business as a going concern undertook this decision under reasonable assumptions.

[38] §1104 of the Bankruptcy Code.

[39] See Re Caremark International Inc. Derivative Litigation, 698 A.2d 959, 971 (Del. Ch. 1996), where the Delaware Court stated that: “only a sustained or systematic failure of the board to exercise oversight – such as an utter failure to attempt to assure a reasonable information and reporting system exists – will establish the lack of good faith that is a necessary condition to liability”. According to this statement, judge ALLEN considered that the breach of board’s duty to oversight is “possibly the most difficult theory in corporation law upon which a plaintiff might hope to win a judgement”.

[40] The fact that the appointment of a supervisory body is not mandatory makes it more difficult for the plaintiff to argue the inadequacy of the organizational structure. See Citigroup Inc. Shareholder Litig., 2009 WL 481906 (Del. Ch. 2009), where the Court stated that: “indeed, plaintiffs’ allegations do not even specify how the board’s oversight mechanisms were inadequate or how the director defendants knew of these inadequacies and consciously ignored them”.

[41] This opinon is shared by G. TERRANOVA Insolvenza, stato di crisi, sovraindebitamento, 2013, p. 16, according to which: “in ogni caso, l’istituto dell’allerta presuppone una collaborazione del debitore; ma, se gli amministratori ed i sindaci delle società in crisi facessero fino in fondo il loro dovere, le situazioni di pericolo sarebbero tempestivamente segnalate, già sulla base delle normative vigenti”.

Dott.ssa Elena Terrizzi

Dottoranda in Diritto e Impresa presso la LUISS Guido Carli.

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