Business crisis - choices regarding crisis resolution

tools - position of shareholders

Company: GuberBanca S.p.a.

Tutor: Enrico Ginevra, Francesco Bordiga

The Italian Insolvency and Crisis Code (hereinafter also referred to as “IICC”), in redesigning the topic of duties of corporate bodies in managing a crisis, has established a regulatory link between crisis law and corporate law.

The cornerstone of the regulation is represented by the introduction of the “trans-typical” duty to establish organizational structures under Article 2086, second paragraph, of the Italiam Civil Code, which distinguishes two distinct “phases” in which this duty is articulated: a preliminary phase of detecting signs of distress, and a subsequent phase where the choice of appropriate reaction methods of overcoming the identified tensions has to be made.

The IICC, by enriching the duties provided for by Article 2086 of the Italian Civil Code with additional systematically relevant coordinates, provides detailed indications regarding the content of organizational structures aimed at detecting the crisis, expands the range of resolution tools, explicitly outlines the interests to pursue during the insolvency phases, defines - also through a distinction between the notions of “crisis” and “insolvency” - these phases with greater rigour than in the past, and articulates a (innovative if not “revolutionary”) regulation under Article 120bis of the IICC regarding the position of shareholders in managing a struggling company.

With reference to those latter aspects, the project aims to investigate the content and limits of power-duty of managers in choices related to the crisis, specifically focusing on the position of shareholders (and their representative body) - as regulated by the new rules now provided under Article 120bis - and on the relevant interests and limits to the managers’ discretion in the aforementioned decision-making area, taking into account the contemporary trends in valuing the interests of stakeholders and the particular role these interests play in a crisis situation.

The project sets the objective of analyzing the research topic using a comparative approach, including a study period abroad and taking into account concrete business realities through an internship period within the affiliated company (Guber Banca S.p.a.), which is active in managing, from a creditor’s perspective, strategically significant positions concerning companies in crisis and, in general, so-called special situations.