The Insolvency Regime for Large Enterprises in Italy: An Economic and Legal Assessment

By Nazim Belhocine, Daniel Garcia-Macia, Jose M Garrido

September 28, 2018

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Nazim Belhocine, Daniel Garcia-Macia, and Jose M Garrido. The Insolvency Regime for Large Enterprises in Italy: An Economic and Legal Assessment, (USA: International Monetary Fund, 2018) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The modernization of Italy’s insolvency framework has been the subject of much interest in recent years, related not least to its role in potentially facilitating an efficient allocation of resources. A unique feature of Italy’s insolvency framework is a special regime for large enterprises known as “extraordinary administration”. This paper evaluates the merits of this special regime by assessing its efficacy and success in achieving its stated goals and comparing its features to international standards and best practices. It finds that the special regime tends to impose large costs on creditors and the state. The regime results, in most cases, in the sale of parts of the group, followed by a liquidation phase of the remaining assets which can take longer than the general regime, hindering legal certainty for creditors and more generally economic efficiency, investment and job creation. Based on international best practices and experience, consideration should be given to folding the special regime into the general insolvency regime, possibly with provisions to allow for state intervention in specific well-defined circumstances.

Subject: Administration in revenue administration, Corporate insolvency, Economic sectors, Employment, Financial crises, Financial sector policy and analysis, Labor, Revenue administration, Solvency, Special resolution regime

Keywords: Administration in revenue administration, Aid support, Bankruptcy of large enterprises, Business activity, Company group level, Competition authorities, Corporate insolvency, Employment, Enterprise court, Europe, Extraordinary administration, Insolvency regime, Large enterprise, Marzano firm, Restructuring company, Solvency, Special insolvency regime, Special resolution regime, State aid, State guarantee

Publication Details

Pages:

34
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/218
Stock No:

WPIEA2018218
ISBN:

9781484378427
ISSN:

1018-5941

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