Saggio
The Pre-Pack Mechanism in the Proposal for a Directive 2022/0408 of the European Parliament and of the Council*
Luca Mandrioli, Adjunct Professor of Insolvency Law at the University of Modena and Reggio Emilia
3 Novembre 2025
*Il saggio è stato sottoposto in forma anonima alla valutazione di un referee.
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This article concerns the pre-pack mechanism, ruled by Proposal for a Directive 2022/0408 of the European Parliament and of the Council, as an instrument to enable the sale of a business or a division thereof to the highest bidder during the debtor’s insolvency proceedings. While the preparation phase is aimed at finding a suitable buyer with the assistance of the Monitor, the liquidation phase – which begins when insolvency proceedings are opened in accordance with national law – is dedicated to approving and executing the sale of the debtor’s business or a division thereof and distributing the proceeds among creditors. The Author also focuses on the analysis of certain provisions relating to the transfer of the production complex and then examines the coordination issues, in the event of implementation of the Directive, of the pre-pack mechanism with the Italian Business Crisis and Insolvency Code and with the protections of employees under Directive 2001/23/EC.
This article concerns the pre-pack mechanism, ruled by Proposal for a Directive 2022/0408 of the European Parliament and of the Council, as an instrument to enable the sale of a business or a division thereof to the highest bidder during the debtor’s insolvency proceedings. While the preparation phase is aimed at finding a suitable buyer with the assistance of the Monitor, the liquidation phase – which begins when insolvency proceedings are opened in accordance with national law – is dedicated to approving and executing the sale of the debtor’s business or a division thereof and distributing the proceeds among creditors. The Author also focuses on the analysis of certain provisions relating to the transfer of the production complex and then examines the coordination issues, in the event of implementation of the Directive, of the pre-pack mechanism with the Italian Business Crisis and Insolvency Code and with the protections of employees under Directive 2001/23/EC.
Riproduzione riservata
Sommario:
1 . The Proposal for a Directive for the harmonization of Insolvency Law
2 . The pre-pack mechanism: an overview
3 . The scope of the instrument
4 . The preparation phase and the role of the Monitor
6 . The specific provisions about the transfer of the production complex
7 . The integration of the pre-pack into the Italian Business Crisis and Insolvency Code
1 . The Proposal for a Directive for the harmonization of Insolvency Law
In the wake of the InsolvencyDirective 2019/1023 on insolvency matters, on 7th December 2022 the European Commission submitted the Proposal for a Directive 2022/0408 of the European Parliament and of the Council [1] with the aim of harmonising the disciplines on insolvency of the various Countries, the lack of which is considered by the European Union to be an obstacle to both the free movement of capital and to greater integration of the capital markets [2].
However, while the Insolvency Directive focused on eliminating conflicts in the national law of the Member States relating to debt restructuring procedures, the Proposal is exclusively dedicated to liquidation procedures [3].
However, while the Insolvency Directive focused on eliminating conflicts in the national law of the Member States relating to debt restructuring procedures, the Proposal is exclusively dedicated to liquidation procedures [3].
More precisely, by focusing the attention on certain aspects considered of primary importance in the scenario of crisis and insolvency law, the aim is to make the European Union more attractive for foreign and cross-border investors, thus reducing the uncertainties linked to the diversity of the systems applied in the various member Countries [4]. The fragmentation of insolvency rules at national level and, above all, the different timescales for the liquidation of the companies often produce deeply heterogeneous results. Not only legal lack of clarity leads to higher information costs for cross-border creditors compared to those operating at national level, but often, in some Member States, procedures take a long time and lead to the recovery of small sums [5]. These latter aspects, at a glance, increase uncertainty and risk for investors. This contributes to increasing the cost of capital for the company and, in the case of a high level of uncertainty, also discourages investments and the company’s ability to obtain financing for the development of its economic activity.
With the clear aim of remedying such a situation, the Proposal for a Directive addresses a wide range of issues which, although different, are capable of impacting on the current provisions of the Italian Business Crisis and Insolvency Code. In fact, in addition to the provision of some harmonisation rules on avoidance actions aimed at countering the debtor’s behaviour in the removal of assets from the insolvency estate before the start of the procedure [6] and the obligation for administrators to take action to request the opening of insolvency proceedings within three months from the moment of knowledge or knowability of the state of insolvency of the entity [7], the attention of the EU legislator has also focused on strengthening the powers of the bankruptcy trustee in identifying the assets belonging to the estate, encouraging the provision of the debtor’s data regarding the traceability of the assets and access to public registers [8] and on the role of the creditors’ committee[9]. Then, the Proposal dwelt extensively on the topic which concerns this contribution, namely the so-called pre-pack procedure for the sale of the debtor’s assets, under the control of a specific Monitor, in order to reduce the time required for the related operations and maximise the value of the assets by transferring all or part of the business to a previously identified buyer, thus allowing the continuation of the business as a going concern [10].
The long approval process – not yet concluded at the time of this writing – has however seen numerous stages follow one another to date [11]. The first examination of the Proposal began on 7th March 2023 and took place during the Swedish, Spanish and Belgian Presidencies of the Council of the European Union. During the latter, a first compromise option was presented on Titles I (General provisions), II (Avoidance actions), III (Tracing assets belonging to the insolvency estate), IV (Pre-pack proceedings), V (Directors’ duty to request the opening of insolvency proceedings and civil liability) and VII (Creditors’ Committee). During the Hungarian Presidency, a partial general approach was then reached on the Proposal, which included Titles II, III, V and VIII (Measures enhanching transparency of national insolvency laws) and the related provisions of Title I, while the Polish Presidency continued the process with a view to reaching an agreement and starting negotiations with the European Parliament.
In particular, the work focused on the Titles not included in the partial general approach elaborated during the Hungarian Presidency, namely IV, VI (Winding-up of insolvent microenterprises), VII and IX (Final provisions), and on the provisions of Title I. Furthermore, some provisions of Titles III, V and VIII were adapted.
On 12th June 2025, the Council of the European Union reached the so-called “general approach” on the draft Directive, following the “partial” approach reached in December 2024 during the Hungarian Presidency. In the final stage of the decision-making process, EU efforts focused in depth on the so-called pre-pack mechanism, the elimination of the winding-up of insolvent microenterprises due to concerns about its practical applicability and its potential impact on existing national systems, and, lastly, on the Creditors’ Committee, providing for its establishment with the aim of involving creditors in the insolvency proceedings and ensuring that their interests are adequately represented.
The general approach adopted only a few months ago by the Council precedes the negotiation phase with the Parliament, at the end of which they will likely elaborate an agreement on the final version of the Directive, which may well differ from the current one. This is the so-called trilogue, i.e. the informal negotiation which brings together, within the ordinary legislative procedure, representatives of the European Parliament, the Council of the European Union and the European Commission, the latter acting as mediator, with the aim of reaching a provisional agreement on the act in question – and on the aspects still unresolved – between the Parliament and the Council, with a view to its formal adoption [12].
Once the text is definitively approved, the Directive must be implemented – based on the current Article 71 – within three years of its entry into force. To this end, the Italian Parliament must, as is customary, approve the European Delegation Law [13], which grants the Government the power to adopt legislative decrees to introduce the provisions of the Directive into Italian law. Then, the legislative decree will be published in the Official Journal, and Italy will notify the European Commission of the implementing measures adopted.
Once the text is definitively approved, the Directive must be implemented – based on the current Article 71 – within three years of its entry into force. To this end, the Italian Parliament must, as is customary, approve the European Delegation Law [13], which grants the Government the power to adopt legislative decrees to introduce the provisions of the Directive into Italian law. Then, the legislative decree will be published in the Official Journal, and Italy will notify the European Commission of the implementing measures adopted.
In such a complex scenario, still uncertain as to the final outcome, this contribution therefore has the exclusive objective of examining in depth the content of the phases of the pre-pack mechanism and its purpose, necessarily analysing the role of the Monitor and also investigating the coordination problems, in the event of implementation, with respect to the instruments outlined by the Italian Business Crisis and Insolvency Code in negotiated settlements of the crisis, in simplified composition with creditors and in composition with creditors, in addition to interference with labor law.
2 . The pre-pack mechanism: an overview
Although configured in terms that are not always entirely superimposable to those that distinguish the Proposal for a Directive, the pre-pack is actually an instrument already existing in the insolvency law of many States, not only at an international but also at the European level [14].
Generally speaking, in the experience gained to date in the field of crisis and insolvency, the same has been widely used to facilitate business rescue and indirect business continuity through confidentially negotiated solutions, with rapid timelines, albeit mostly of a restructuring nature.
In particular, it has assumed significant proportions in the United States, where for several decades the phenomenon of so-called prepackaged Chapter 11 proceedings exists, involving entrepreneurs in economic-financial difficulty who reach an agreement with their main creditors regarding the terms of a plan for admission to this procedure and solicit participation in the same before filing a petition for the opening of proceedings, during which they ask the Court to confirm the plan itself [15].
Beyond the Atlantic Ocean, the instrument is also used in Canada [16] while across the Channel it is used in the legal systems of the United Kingdom [17], being found within the so-called administration – regulated by the Insolvency Act 1986 and the Administration Regulations 2021 – i.e. an insolvency procedure in which a company organizes the sale of the production complex to a buyer before formally entering administration and, once the administrator has been appointed, the sale is completed almost immediately, allowing the company to continue operating under the direction of the new owner with almost no interruptions. A pre-pack concept is also found in the UK Insolvency Pratictioners Association’s Statement of Insolvency Practice Number 16 (SIP 16), where the term pre-packaged sale refers to an agreement under which the sale of all or part of a company’s business or assets is negotiated with a buyer prior to the appointment of an administrator, who carries out the sale immediately after appointment, or in any case within a short timeframe.
Beyond the Atlantic Ocean, the instrument is also used in Canada [16] while across the Channel it is used in the legal systems of the United Kingdom [17], being found within the so-called administration – regulated by the Insolvency Act 1986 and the Administration Regulations 2021 – i.e. an insolvency procedure in which a company organizes the sale of the production complex to a buyer before formally entering administration and, once the administrator has been appointed, the sale is completed almost immediately, allowing the company to continue operating under the direction of the new owner with almost no interruptions. A pre-pack concept is also found in the UK Insolvency Pratictioners Association’s Statement of Insolvency Practice Number 16 (SIP 16), where the term pre-packaged sale refers to an agreement under which the sale of all or part of a company’s business or assets is negotiated with a buyer prior to the appointment of an administrator, who carries out the sale immediately after appointment, or in any case within a short timeframe.
The trend toward introducing pre-pack instruments into domestic law has also affected Ireland [18], where this term refers to the sale of a distressed company in which the sale agreements are negotiated and documented before the commencement of formal insolvency proceedings and are executed at the time or immediately after the appointment of the insolvency practitioner.
In addition to the above, among the EU Countries a situation similar to that regulated by the Proposal for a Directive can already be found in Spain [19], in France [20], in Germany [21], in Greece [22], in Belgium [23] as well as in the Netherlands [24] and the Czech Republic [25]. So-called pre-pack systems are even applied in India [26], the Philippines [27], the Cayman Islands [28], Australia [29] and Singapore [30].
In addition to the above, among the EU Countries a situation similar to that regulated by the Proposal for a Directive can already be found in Spain [19], in France [20], in Germany [21], in Greece [22], in Belgium [23] as well as in the Netherlands [24] and the Czech Republic [25]. So-called pre-pack systems are even applied in India [26], the Philippines [27], the Cayman Islands [28], Australia [29] and Singapore [30].
However, if we wish to focus on the draft Proposal for a Directive in the version recently reached at the General Approach stage, it should first be highlighted that Article 2, which represents the container of the definitions of the Proposal itself [31], describes the pre-pack – consisting of a preparation phase and a liquidation phase [32] – no longer as a procedure, as in the original version, but rather as a mechanism designed to allow the sale of the operating company or a branch thereof to the highest bidder, during the debtor’s insolvency proceedings. While the preparation phase is therefore aimed at finding a suitable buyer, the liquidation phase – which begins, pursuant to Article 25, when the decision to open insolvency proceedings is taken in accordance with national law – is aimed at approving and executing the sale of the debtor’s business or a branch thereof and distributing the proceeds among the creditors.
Ultimately, this preparatory segment represents, as will be better understood in the following paragraph 4, a sort of “antechamber” to the subsequent liquidation phase, which completes it: it is essentially dedicated to market research for potential buyers in order to organize the sale of the production complex or a portion thereof before the formal start of insolvency proceedings. This interest, if real, will be reflected in a procedural framework in which the second phase will constitute a largely new parenthesis compared to the rules currently in force in the various liquidation proceedings.
The objective is, in fact, to establish, in advance of a divestment plan triggered by the debtor’s insolvency, a rapid, transparent, and competitive mechanism for the disposal of the company or a branch thereof, while the business has not ceased to exist yet, in order to achieve the best outcome for the creditors. All of this by placing the approval and execution of the transfer, under our legal system, immediately after the opening of the judicial liquidation or extraordinary administration of large companies in crisis that adopts the plan for the sale of production complexes, or of the compulsory administrative liquidation, or of the composition with creditors or debt restructuring agreement, the latter two of which are characterized by a liquidation plan [33].
Furthermore, pursuant to the provisions of Article 1, paragraph 3, of the Proposal for a Directive, the provisions of Title IV on pre-pack apply, in the current version, exclusively to debtors who are legal persons [34], with the exception of certain entities expressly indicated in paragraph 2, including insurance companies, credit institutions, investment firms, collective investment undertakings and public bodies. However, Recital 22 quater is quick to clarify that Member States may extend these provisions to natural persons who are entrepreneurs.
On the assumption that the “Recitals” in EU legislation cannot contain mandatory statements distinct from those used in the enacting provisions, but must own a mandatory nature specifying the reasons underlying the provisions of the act to be adopted, and that those which, as in the case at hand, simply state the need to adopt certain rules without indicating the underlying reasons[35] must also be banned, there is no doubt that they need to be interpreted.
Indeed, on this point, without prejudice to the criticisms made above regarding Recital 22 quater, the Proposal for a Directive, by omitting the reference to partnership companies, thus raises the serious doubt that these can benefit from this mechanism, given that it is not possible to include them in the definition of legal persons, even if they have imperfect financial autonomy, nor in that of natural person entrepreneur to which the derogation refers.
However, it is true that the possibility of extending the provisions under consideration to this latter category of businesses should, all the more, allow for the inclusion of partnership companies in the decision left to the various Member States. Based on the experience, culture and knowledge of Italian jurists and their consequent contribution to the assessment and understanding of the interests at stake, the perception of such an exception could hardly be limited to individual entrepreneurs alone. However, the interpretative dilemma in question is certainly not among the easiest to resolve. Indeed, it is well known that the exegesis of a legal text – which, for the reasons outlined above, also applies to the Recitals – often occurs on the basis of a framework that is not entirely neutral, since, in order to be correct, it cannot ignore its presuppositions and, specifically, an understanding of the underlying real problems. Nothing excludes the possibility that, by virtue of the well-known principle of legal pre-understanding[36] – that is, the prefiguration of the prescriptive meaning of the provision and the situation it is intended to regulate [37] – there may be different readings in the various Member States that will have to implement the Directive, once it is approved.
Moreover, it is clear that understanding precedes and conditions interpretation [38]. Indeed, the jurist always approaches the text with a «certain expectation» [39] in order to resolve any conflict that the interpreter is called upon to address in practice [40]. In the case at hand, it is therefore clear that this preconceived notion – which is the initial assumption with which the jurist, based on the knowledge and the regulatory framework, «sets the interpretative process in motion» [41] – will likely lead our domestic legislator to believe that this extension, if applied, cannot be limited to individual entrepreneurs on the assumption that the collective one is limited to legal persons, since, if that were the case, the reason for the exclusion of partnerships would be incomprehensible.
As for the objective basis of the pre-pack mechanism, the Proposal for a Directive allows Member States – by virtue of the provisions of Article 22 bis, paragraph 5 and 6 – to legislate in order to introduce a ban on initiating the preparation phase when the debtor is already unable to pay its debts as they fall due in accordance with national insolvency legislation – which in our legal system coincides with the concept of a state of insolvency – and can only be initiated in the event of probable insolvency, which essentially corresponds to the concept of a state of crisis referred to in Article 2 Italian Business Crisis and Insolvency Code.
This is also related to Article 23 of the Proposal, which establishes the possibility for Member States to provide that, during the preparation phase, the debtor can benefit from the suspension of individual enforcement actions pursuant to Articles 6 and 7 of Directive (EU) 2019/1023 [42], not only when insolvent but also when in a situation of probable insolvency under national law, if such a protective umbrella let to be easier and facilitates the implementation of the pre-pack mechanism, and provided that the Monitor is heard by the judicial authority before the relevant decision.
However, the provision in Article 22 bis, insofar as it prohibits recourse to the preparation phase in the absence of insolvency, does not appear to be free from a series of operational and systemic consequences. In this regard, if the provision specified above were to remain unchanged in the final version of the Proposal, firstly, it would be highly unlikely that a not-yet-insolvent entrepreneur would request the appointment of a Monitor to initiate the preparation phase, as they would likely seek a restructuring solution rather than liquidation as the preferred option.
Secondly, this would even conflict with the principles of the Proposal for a Directive. The start of the preparation phase presupposes the subsequent opening of the liquidation phase within insolvency proceedings. Therefore, it is necessary to ask how it would be possible to appoint a Monitor, identify and select the bidder if there is no guarantee of the possibility of transferring the production complex and authorizing the sale. In this case, there would be no certainty that the conditions for initiating liquidation proceedings – such as judicial liquidation, composition with creditors, compulsory administrative liquidation, extraordinary administration of large companies in crisis and debt restructuring agreements – would arise in the meantime, given the absence of insolvency.
Finally, the Proposal for a Directive requires, in Article 19, paragraph 1 bis, Member States to ensure that debtors benefiting from the pre-pack mechanism are authorized to undertake at least ordinary management acts during the preparation phase, in order to continue the regular operation of the company. The term “authorization” should be understood to mean that domestic legislators must allow the debtor the freedom to undertake that acts.
3 . The scope of the instrument
We have already seen how the pre-pack, within the liquidation of the debtor’s assets, serves the purpose of preparing for the sale of the company or a branch thereof by identifying – before insolvency proceedings are initiated and difficulties arise in the continuation of the business – a buyer, if one exists. This, on the one hand, fuels hopes of a greater chance for creditors being satisfied and, on the other, removes the threat of the production complex devaluing in the meantime.
Indeed, when an entrepreneur enters bankruptcy proceedings, customer confidence collapses, resulting in a decline in sales. Debt collection becomes evidently difficult, as the debtor no longer has bargaining power. Necessary investments are prevented by a lack of liquidity and skilled workers flee due to instability and fears of job losses. In short, the entire value of the business is quickly eroded.
In light of this, it is immediately clear that the pre-pack, in consideration of its division into phases, represents an instrument aimed at protecting the interests of creditors, at least to the extent that would be due to them in the event of an atomistic divestment, and designed to ensure that the transfer of the company takes place through a competition between the interested purchasing entities [43].
In light of this, it is immediately clear that the pre-pack, in consideration of its division into phases, represents an instrument aimed at protecting the interests of creditors, at least to the extent that would be due to them in the event of an atomistic divestment, and designed to ensure that the transfer of the company takes place through a competition between the interested purchasing entities [43].
The focal point of the mechanism under examination is, in fact, represented by the identification, by the debtor, of the transferee and of the conditions of the sale before the start of the insolvency procedure [44]. The initiative is exclusively up to the entrepreneur, who can evidently influence the outcome of the liquidation, considering also that the transferee could be, as will be better illustrated in the following paragraph 5, a party closely related to it [45]. However, this transfer is prepared with the assistance of the Monitor and the supervision of the Judicial Authority which also controls the phase preceding the initiation of the liquidation procedure.
The instrument under analysis is therefore aimed at preventing the start of bankruptcy proceedings from having negative consequences on goodwill, favouring, on the contrary, the circulation of the business in order to quickly obtain the maximum proceeds to satisfy creditors’ claims and to preserve employment [46]. This consideration is valid, although it could represent a risk for creditors – in particular for unsecured creditors who, unlike privileged creditors, do not have a preferential position in the distribution phase – given that the sale to a predetermined entity outside the rules established for liquidation in bankruptcy proceedings could prevent the realisation of the fair price, neglecting other more advantageous offers [47].
Regardless of this reflection, it should be emphasized that the pre-pack introduces a competitive mechanism that, while not governed, is nonetheless controlled by the Monitor, while the business continues to be managed by the debtor. This prevents the business from being excessively prolonged, pending the liquidation procedure, awaiting the selection of the successful bidder and the subsequent transfer. Once the phase of divestment of assets has begun, the continuation of the business may, in fact, be limited to the time strictly necessary to obtain the authorization for the sale of the production complex pursuant to Article 26 of the Proposal for a Directive.
However, since the public auction can last up to three months and be held – at the discretion of the Member States – during the liquidation phase rather than the preparation phase, it must be emphasized that this aspect is not free from an obvious danger: that the value of the company may be subject to a change in the time frame between the selection of the initial bidder and the transfer of the production complex or a branch thereof, as a result of the company’s management, which could determine an increase or decrease in value, thus impacting the results of the competitive process.
Regardless, it’s worth noting that the pre-pack outlines a clear separation between the circulating event of the production complex – which, in the preparation phase, comes before the settlement of the creditors and which has its own separate preliminary phase of the liquidation procedure – and the latter. The EU legislator thus acknowledges that the fate of the production complex is one matter, for which it reserves a specific space – the preparatory segment – by assigning the Monitor the role of supervisor of the sale process and the debtor that of the company’s continuer. The settlement of the creditors, however, is completely another matter, reserved for the administrative body of the procedure and the delegated judge in the subsequent liquidation phase.
The institution thus resolves many of the problems arising from the difficult coexistence between business continuity – which, although indirect, involving the transfer of the production complex, is nevertheless direct until the transfer process is finalized – and the insolvency liquidation procedure, which is still modeled after the forced expropriation process. This procedure imposes a restriction on the availability of assets, which will be exclusively sold to the selected bidder, and determines the debtor’s mitigated dispossession in composition with creditors or full dispossession in a judicial liquidation.
4 . The preparation phase and the role of the Monitor
Among the two phases in which pre-pack is divided, the preparation phase undoubtedly contains the most innovative ideas, given that the subsequent liquidation phase is indeed destined to be grafted onto the insolvency regulation instrument that will be chosen by the debtor.
In this regard, the Proposal establishes that it is the responsibility of the Member States to legislate in order to initiate the preparatory segment through the appointment of a Monitor on the basis of a procedure that must be established in accordance with the rules of domestic law, thus placing the debtor’s initiative in «a purely public context» [48]. From this perspective, the EU legislator does not appear to necessarily impose a judicial designation, as this could in fact also be done by a specific administrative commission, similar to what happens for the designation of the Expert in the negotiated settlement of the crisis.
Being also able to be defined as a commissioner [49] or an auxiliary [50], the Monitor must be independent from the entrepreneur and the parties related to him, without prejudice to the fact that the Member States may introduce further requirements of impartiality with respect to the holders of capital instruments and/or creditors, in addition to the circumstance that this person must satisfy the admissibility criteria established in the Member State for insolvency practitioners [51]. This means, consequently, that, insofar as it is relevant for the purposes of the Italian insolvency system, this person must have the characteristics required of the bankruptcy trustee as a body of judicial liquidation [52].
Particularly delicate tasks are assigned to the Monitor on the basis of Article 22 bis[53]. It has the duty to justify the reasons why it believes that the process of selecting the potential buyer, undertaken in the preparation phase, has respected the constraints of competitiveness, transparency and fairness by reaching market standards [54]. On this last aspect, a possible indication as to the requirements to be satisfied can be found in Recital 26, where it is specified that the process should be compatible with the rules and practices on mergers and acquisitions established in the Member State, including, among other aspects, the invitation to the possibly interested parties to participate in the sale, the disclosure of information to potential buyers and the possibility of formulating offers through a structured procedure. Furthermore, the Monitor has the duty to report to the Judicial Authority on each phase of the sale process, with the consequence that it is quite clear that the activity must necessarily be documented in writing. Each Member State, taking into account the significant role of the Monitor, may also introduce the provision for liability for damages caused to creditors in the event of failure to comply, intentionally or through negligence, with the obligations that incumbent on it.
Ultimately, among the main tasks of this subject is to recommend [55] the best bidder, in accordance with Article 30 of the Proposal, in order to undertake the subsequent liquidation phase, and to express an opinion on whether the offer does not constitute a violation of the best interest of creditors test according to which no creditor must be found, in the event of the production complex being transferred in the context of a mechanism of pre-pack, in a worse situation than that which would arise if the conversion of the assets into cash took place in a liquidation procedure taking into account the graduation rules established by the legal system.
However, it is true that the net of articles of the Proposal does not offer a clear and precise definition of these criteria of selection, but in its Article 30, on the subject of “Common provisions”, it simply refers their determination to the Member States so that they ultimately coincide with the rules that are applied for the selection of competing offers in the insolvency proceedings.
In order to achieve the objective of ensuring a fair market price, the Proposal for a Directive nevertheless leaves Countries broad freedom to decide whether to hold a public auction for the sale of the production complex and, if so, whether to schedule it at the beginning of the liquidation phase or earlier, i.e. pending the preparation phase. If a public auction is held, European Union Member States are also granted the option of waiving the Monitor’s obligation to justify compliance with the criteria of competitiveness, transparency, fairness and compliance with market rules, since these are effectively ensured by the mandatory competitive process. A similar provision for waiving the aforementioned requirements applies if the best offer is approved by the creditors in accordance with national law.
In this regard, Member States are also entitled to establish that the preparation phase is not only limited in time, but can also be interrupted at any time if it has no reasonable prospect of success. This does not affect the same outcome in cases where the debtor fails to provide the necessary assistance to the Monitor pursuant to Article 22 bis, paragraph 2, and in cases of lack of diligence on the part of the entrepreneur. On the contrary, Article 23 bis of the Proposal for a Directive provides that, if a creditor submits a request to open insolvency proceedings during the preparation phase, the initiation of the liquidation segment may be suspended if, taking into account the circumstances of the case, this is not in the general interest of creditors.
Among the most singular aspects is also the obligation to remember that in the latest version the Proposal it is stated in Recital 22 – and without this having been transposed into the framework of the legislative act – that the preparation phase should be confidential at least with regard to the efforts directed towards finding a suitable buyer, thus emphasizing the confidentiality nature typical of the negotiations that attend the activities of business transfer operations [56]. The above requires two reflections. The first focuses on the meaning of the scope of the Recital with respect to the legislative act and, in our case, to the Directive, while the second concerns the interpretation of the term “reserved”.
If, as mentioned above, the Recitals do not create legal obligations nor derogate from the binding provisions of the main text, but help the interpreter to identify the ratio and meaning to be attributed to the provisions, thus having a guiding function for a better understanding of the articles, it follows that the confidentiality aspect does not represent an element on which the Member States will have to legislate by adopting the Directive, but, at most, it may act as a guide and orientation for the aforementioned in the act of transposition, possibly making it their own [57].
But while the foregoing does not seem to raise any further doubt, it is important to note that the Proposal for a Directive does not explicitly clarify whether confidentiality extends to the entire preparation phase – which would therefore be unknown to only a few parties involved, including the debtor, the Monitor and potential buyers – or is actually limited to the content of the preliminary agreements with the interested parties. In other words, the question arises as to whether it is access to the preparation phase or only the object of the negotiations conducted therein that is confidential. While the first of the two solutions would be based on the need to preserve goodwill, without creating a state of concern for creditors, suppliers and customers, whose chain reactions could ultimately drive them away from the company, jeopardizing business continuity as well as the negotiations aimed at the sale, the second is based primarily on the protection of strategic information that, if disclosed, could harm the debtor, taking into account that, more often than not, the potential interested parties are actually the entrepreneur’s competitors.
In this regard, it is true that access to negotiated settlements of the crisis is also public knowledge, as negotiations are exclusively between the debtor and creditors, under the aegis of the Expert. However, if the pre-pack mechanism seeks to preserve the company’s value, making the appointment of a Monitor publicly available could have significant consequences. Since this appointment – unlike negotiated settlements of the crisis, which leave the door open to multiple solutions, including debt restructuring – always precedes insolvency proceedings, a supplier is unlikely to be willing to supply a company again, risking its credit not being fully satisfied or the payment for the supply being subject to an avoidance action. Furthermore, the lack of recognition of the priority claims arising after the Expert’s appointment often results in suppliers requesting payment upon delivery of the goods. If the above is true, within the context of negotiated settlements of the crisis, which is finding widespread application, opening the door to various solutions to crisis and insolvency, even those not of a liquidation nature, it is even more likely that this could occur in a process already outlined in terms of judicial liquidation rather than in any other case of non-conservative insolvency proceedings.
On the other hand, in general, it is true that in our legal system, the confidentiality of the preparation phase alone would end up representing a really peculiar event, considering the information obligations that must be fulfilled by the Company Register if the debtor intends to access an insolvency regulation instrument.
However, regardless of the various assumed paths, that the latter must ultimately be the correct solution seems unequivocally clear from an absolutely crucial point. Since Article 23 of the Proposal also allows for and obtains a stay of individual enforcement actions pursuant to Insolvency Directive 2019/1023, it is therefore clear that the proceedings cannot remain confidential, as it is subject to publication in the Companies Register as well. It is therefore likely, given the foregoing, that the guidance in favor of confidentiality contained in Recital 22 appears more appropriately designed to emphasize the importance of confidential discussions with potential interested parties regarding the content of the agreements and their identities, and until an agreement is reached that leads to the submission of the offer to purchase the company or a branch thereof, rather than to avoid making the use of the preparation phase and the appointment of the Monitor publicly known.
5 . The liquidation phase
Symmetrically to the preparation phase, Article 26 of the Proposal establishes the principles to which domestic legislators must adhere in regulating the liquidation phase, which, pursuant to the previous Article 20, can only be undertaken within insolvency proceedings other than preventive restructuring.
It is therefore up to the Member States to ensure that, upon its opening, the court or competent authority authorises the sale of the debtor’s business or part thereof, in at least one of the following cases, namely if:
i) the buyer has been proposed by the Monitor, provided that the latter has issued a confirmatory opinion that the transfer process carried out during the preparation phase complied with the requirements established by Article 22 bis, paragraph 1, and this has been ascertained by the court or competent authority together with the provisions set out in paragraphs 1 and 2 of the same Article;
ii) the buyer has been selected through a public tender procedure, where Member States provide for one, using the offer identified by the Monitor as the starting price;
or even if:
iii) the transfer to the purchaser was approved by the creditors in compliance with Article 22 bis, paragraph 4.
The Proposal for a Directive also states, in a not totally clear wording, that European Union Countries have a duty to ensure that the protections granted to the initial bidder in the preparation phase are commensurate and proportionate. This clarification is in line with the so-called stalking horse system, that is an initial offer characterised – as set out in Recital 27 of the Proposal itself – by a series of incentives that the debtor grants to the original bidder, taking responsibility for the reimbursement of expenses and any penalty (the so-called breakup fee) [58], in the event that, at the public auction, the successful bidder is a different party; these incentives, however, must not be such as to dissuade potential interested parties from participating in the tender and to negatively interfere with the principle of competitiveness. The figure of the stalking horse – which is found in several Chapter 11 procedures in the United States and Canada [59] – is characterised by the fact that the same, in carrying out the first offer, thus lays the foundations for the subsequent sales process which, not being able in principle to be subject to modifications [60], will constitute the reference model for the subsequent tender, stimulating the market to seek the maximisation of the value of the assets.
The Proposal for a Directive also lays down specific precautions in the event of an offer coming from closely related parties, i.e. those subjects, as defined in Article 2, who are linked to the entrepreneur by virtue of certain relationships, requiring the interested party to communicate its relationship with the latter to the Monitor and providing that any other potential offerors are adequately informed thereof; furthermore, these must be granted sufficient time for a thorough examination aimed at submitting an offer in order to eliminate any information asymmetries [61]. However, if the offer submitted by a party closely related to the debtor is deemed to be the best, the Proposal for a Directive authorizes Member States to adopt further measures to safeguard and protect the creditors and necessary to proceed with the authorization and execution of the sale of the production complex or part of it. The sensitive nature of the matter under consideration and the initial information mismatch between closely related parties, on the one hand, and any other interested party, on the other, require more attention for the process of identifying the best bidder. Furthermore, Recital 28-sexies of the Proposal includes among the aforementioned additional measures the obligation for the transferee to continue the economic activity for a specified period following the transfer or to maintain existing employment contracts.
Finally, Member States may provide that, where it is demonstrated that the party closely related to the debtor has not complied with the said conditions, the court or competent authority shall proceed to revoke the application of the provisions favorable to the assignee that exempt it from financial liability for the debts of the assignor in application of the rule set forth in Article 2560 of the Italian Civil Code.
To ensure that the winning bid achieves the best market result, the Proposal for a Directive also provides that bidders cannot be granted any pre-emption right while selecting the buyer. The ratio behind this provision is clear: to ensure that the best offer is chosen, the entrepreneur cannot allow anyone to acquire the business before it can be offered to another party, or, in other words, allow one party to be the first to have the opportunity to purchase it if the debtor decides to sell it, thus preventing any third party from acquiring it first. Indeed, such pre-emption rights, if granted during the sale process, would distort competition. Furthermore, exercising them could reduce the ability to sell the assets at the best conditions, preventing the potential buyers from participating in the competitive procedure.
Nonetheless, Member States may provide that pre-emptive rights established by national law that do not affect the debtor’s insolvency are maintained and enforceable. This provision appears to state that only pre-emption rights granted before the onset of insolvency are considered such, and not those arising after it, without prejudice to the fact that the debtor could invite the holders of that rights to participate in the process of selecting the best offer.
If the successful tenderer for the production complex is also a creditor and owns an accessory guarantee to its claim, it may, pursuant to Article 33 bis, paragraph 2, which regulates the discipline of the so-called credit bidding, offset the purchase price of the company with its own credit. In order to avoid that the latter gains an advantage, in the selection of the best bidder, over other interested parties not equally equipped with a secured debt – who would thus end up being discouraged from participating in the selection process – the presentation of the offer is, in the case of a higher guaranteed credit, limited to the market value of the company [62], it being understood that this will not determine for the exceeding part the loss of the guarantee rights of the residual part of credit. In such a circumstance, the risks are however represented by the lack of liquidity made available to the creditors for the purposes of the distribution as well as by an «intentional underestimation by the bidder of the assets encumbered by the guarantee» [63].
Specific rules apply where the bid is subject to approval by the competition authority. In this regard, the Proposal for a Directive requires Member States to ensure that, where there is a significant risk of delay resulting from a competition law procedure or a negative decision by a competition authority regarding a bid submitted during the preparation phase, the Monitor or the debtor takes appropriate measures regarding the submission of bids from other entities. In such a context, the Monitor will be entitled to receive information on applicable competition law procedures and their outcomes that could impact the timing or success of the bid, provided that the communication of such information by the aforementioned authority does not conflict with national rules on the protection of business secrets.
In this regard, the Monitor is subject to a confidentiality obligation in accordance with national law. In the event of a significant delay, the offer may be withdrawn, provided it is not the only one and the delay in concluding the sale of the business to the interested bidder does not result in damages for the debtor.
6 . The specific provisions about the transfer of the production complex
Also the provision of Article 28 of the Proposal for a Directive is particularly important for this paper, since it concerns the regulation of the liabilities of the company acquired through the pre-pack mechanism, according to which the European Union Countries are required to ensure that the buyer takes over the production complex or part of it without being liable for debts inherent to the exercise of the business, unless the former expressly consents to the assumption of some of these [64].
In any case, Articles 27 – regarding the transferee’s subrogation in pending contracts and consequently in the obligations arising from them, as they do not concern so-called “pure” debts for which the exemption from the patrimonial liability of the business transferee applies – and 34, paragraphs 3 and 4, regarding the cancellation of encumbrances, are applicable.
In any case, Articles 27 – regarding the transferee’s subrogation in pending contracts and consequently in the obligations arising from them, as they do not concern so-called “pure” debts for which the exemption from the patrimonial liability of the business transferee applies – and 34, paragraphs 3 and 4, regarding the cancellation of encumbrances, are applicable.
In particular, with reference to the first of the two aforementioned provisions, the Proposal retraces a principle already known in the domestic legal system according to which the patrimonial responsibility of the transferee of a business or of a branch thereof – and therefore also its non-application – is intended to operate, by virtue of the prevailing approach, in relation to merely debt positions, that is to say to the so-called debts considered as themselves and not connected to undefined situations as they have not yet been fully performed, arising from synallagmatic contracts in which one of the two reciprocal performance has already been put into effect [65], when in fact the succession of the purchaser pursuant to Article 2558 of the Italian Civil Code has as its object, precisely, business relationships in which each of the subjects is at the same time creditor of a performance and debtor of another, such that the position of both is found on the active and passive side of the obligation as well [66].
Compared to this rule established in our legal system, the Proposal for a Directive has, however, added further considerations. On the assumption that the value of a going concern is reasonably higher than that of a production complex characterized by the cessation of the business, as it is capable of preserving the value of goodwill, the EU legislator has taken care to introduce specific rules to protect the transferee with regard to the fate of outstanding unfulfilled contracts.
Compared to this rule established in our legal system, the Proposal for a Directive has, however, added further considerations. On the assumption that the value of a going concern is reasonably higher than that of a production complex characterized by the cessation of the business, as it is capable of preserving the value of goodwill, the EU legislator has taken care to introduce specific rules to protect the transferee with regard to the fate of outstanding unfulfilled contracts.
Specifically, to prevent the early termination of such agreements, Article 27 of the Proposal for a Directive requires Member States to ensure that the acquirer of the business also transfers any unexecuted contract necessary for the continuation of the business activity, the suspension of which would paralyze it. Therefore, the transfer does not require the consent of the transferred contracting party, although it is up to individual Countries to decide whether such consent should be required based on the type of contractual act, the status of the parties or the interests of the company; these latter aspects, in Italy, coincide with the concept of a strictly personal contract. Furthermore, not only is withdrawal under national law preserved, but Member States are also granted the option to provide that the other party may withdraw from the transferred contract – in terms not dissimilar to what is provided, in the case of a transfer of a business, under Article 2558 of the Italian Civil Code – with no less than three months’ notice from the transfer. Unexecuted agreements relating to licenses for intellectual and industrial property rights, for which the debtor is the licensor, cannot be terminated without the licensee’s consent. This latter aspect is reasonably dictated by the need to avoid jeopardizing the licensee’s business, which, in the absence of the license right regarding a patent or trademark, would be forced to immediately cease its productive and/or commercial exploitation. Indeed, it is not uncommon for many business transactions to be carried out precisely under IP licensing agreements authorizing licensees to manufacture a good in accordance with the patent’s provisions or to market it under a specific trademark.
With reference to Article 34, paragraphs 3 and 4, the Proposal for a Directive allows addressees to derogate from the ordinary regime under which the cancellation of an encumbrance occurs with the express consent of the secured party. In other words, the text under consideration offers the possibility of introducing the so-called purgation of encumbrances with regard to forced sales, a practice typical of insolvency proceedings.
Then, regarding employee’s credits, Article 28 of the Proposal, with regard to the exemption from the transferee’s financial liability, safeguards the obligations arising from existing employment relationships. In our internal legal system, it is necessary to immediately turn to the provisions of Article 2112 of the Italian Civil Code, according to which, in the event of a transfer of ownership of the company, not only such relationships continue with the purchaser and the employee retains the rights deriving from them, but a joint and several liability exists between the transferor and the transferee with respect to all credits the former party had at the time of the transfer, without prejudice to the latter’s right to consent to the release of the transferor within the scope of the procedures referred to in Articles 410 and 411 of the Italian Code of Civil Procedure.
Finally, since continuing economic activity while awaiting authorization to transfer the production complex – which occurs during the liquidation phase – often makes it necessary for the debtor to resort to so-called interim financing, which is typically concluded within a specific timeframe limited to the preparation phase, the EU legislator has provided for the repayment of the sum to be secured by pre-deduction. In this regard, the Proposal for a Directive allows Member States to grant security interests on the proceeds of the sale in order to secure a preferential path to loan repayment. Furthermore, in case that such financing is provided by the bidder – with the intent not to jeopardize business continuity – the successful transferee will always be able to claim restitution for the sums disbursed, in compensation for the transfer price.
Equally important is the provision which requires Member States to ensure that such loans are not declared null, voidable or unenforceable and that lenders are not held liable, under civil, administrative or criminal law, in case they are prejudicial to the body of creditors, although national law may in any case introduce other grounds in relation to such liability.
Furthermore, the Proposal, by allowing Member States to provide for ex ante control, effectively makes it possible to establish the obligation of prior authorization by the judge or other competent authority, similar to what occurs to the financing referred to in Articles 22 Italian Business Crisis and Insolvency Code in the context of negotiated settlement of the crisis, 99 Italian Business Crisis and Insolvency Code about composition with creditors, and 57, paragraph 4-bis, Italian Business Crisis and Insolvency Code on debt restructuring agreements.
7 . The integration of the pre-pack into the Italian Business Crisis and Insolvency Code
In the Italian bankruptcy system, a mechanism similar to pre-pack it is found in Articles 22 Italian Business Crisis and Insolvency Code which deals with the transfer of the production complex in the negotiated settlement of the crisis, 25 septies Italian Business Crisis and Insolvency Code regarding simplified composition with creditors, and 90 et seq. Italian Business Crisis and Insolvency Code relating to the so-called competing offers referred to in the composition with creditors [67].
However, regarding the aforementioned instruments, there are several structural differences compared to what is envisaged in the Proposal for a Directive. Let’s proceed with order.
However, regarding the aforementioned instruments, there are several structural differences compared to what is envisaged in the Proposal for a Directive. Let’s proceed with order.
If in the negotiated settlement of the crisis the alienation of the production complex can take place both in bonis during its process or afterwards, that is, at its closure and consequently also during the bankruptcy proceedings [68], in the pre-pack the transfer takes place only in the liquidation phase which characterises the latter and, unlike what is established by Article 22 Italian Business Crisis and Insolvency Code, with the effects of a forced sale. Furthermore, while in the negotiated settlement of the crisis the identification of the best transferee is mostly left to the debtor since, pursuant to what is established in the last paragraph of Article 22, paragraph 1, letter d), Italian Business Crisis and Insolvency Code, the Court is exclusively responsible for verifying the «compliance with the principle of competitiveness in the selection of the buyer» [69], in the pre-pack the procedure for choosing the best offer takes place, if the Member States opt for the public tender, by the competent authority or, failing that, it is proposed by the Monitor or approved, where foreseen, by the creditor class.
Similarly to negotiated settlement of the crisis, in the simplified composition with creditors the selection of the offer occurs at the sole initiative of the entrepreneur and according to the structure of a search entrusted to the latter in the absence of codified rules.
Analogous considerations also apply to liquidatory composition with creditors, where the pre-packaging of the transfer is the result of negotiations conducted by the entrepreneur, while the pre-pack involves the supervision of the Monitor, whose work is aimed at offering greater guarantees in reaching a more advantageous solution for creditors.
Analogous considerations also apply to liquidatory composition with creditors, where the pre-packaging of the transfer is the result of negotiations conducted by the entrepreneur, while the pre-pack involves the supervision of the Monitor, whose work is aimed at offering greater guarantees in reaching a more advantageous solution for creditors.
At this point, however, a question arises spontaneously: if the Proposal for a Directive is approved in the text known today, could the pre-pack be grafted onto the various crisis and insolvency regulation instruments as well as the different liquidation procedures, or should it be considered as a new insolvency proceeding?
The answer to such a question is not completely immediate. If, on the one hand, the provision of the two phases – the preparation one, on the one hand, and the liquidation one, on the other – represents a valid argument in favour of the second solution, other considerations of a diametrically opposed nature fuel the opposite conclusion [70].
First of all, the fact that the Proposal for a Directive is expressed in terms of mechanism and no longer of procedure, as in the original text of the European Commission’s draft, certainly constitutes a significant indicator that the same can be implemented by introducing a simpler amendment into our insolvency system [71]. In this regard, it has been observed that, in general, the insertion methodology can be twofold, that is, both of a modifying nature – adapting, in this case, the principles of Title IV to the current institutions of the Italian Business Crisis and Insolvency Code which provide for a pre-packaged transfer of the company or of a branch thereof – and of a substitutive nature, that is, radically rewriting the current rules in order to attribute to the debtor the autonomous power, within the judicial context, to determine a liquidation process aimed at the transfer of the company as a going concern [72].
First of all, the fact that the Proposal for a Directive is expressed in terms of mechanism and no longer of procedure, as in the original text of the European Commission’s draft, certainly constitutes a significant indicator that the same can be implemented by introducing a simpler amendment into our insolvency system [71]. In this regard, it has been observed that, in general, the insertion methodology can be twofold, that is, both of a modifying nature – adapting, in this case, the principles of Title IV to the current institutions of the Italian Business Crisis and Insolvency Code which provide for a pre-packaged transfer of the company or of a branch thereof – and of a substitutive nature, that is, radically rewriting the current rules in order to attribute to the debtor the autonomous power, within the judicial context, to determine a liquidation process aimed at the transfer of the company as a going concern [72].
Notwithstanding the above considerations, it is clear that this inclusion cannot be extended to all provisions of the Italian Business Crisis and Insolvency Code. Specifically, the main obstacle is not integrating the liquidation phase into the various liquidation procedures already existing in Italy, but rather understanding whether the preparation phase – which would appear to be autonomous and not always requiring the opening of concurrent proceedings – is compatible with the national crisis and insolvency regulation instruments available to the debtor.
In the author’s opinion, the pre-pack, as outlined in the Proposal for a Directive, is unlikely to be introduced into the negotiated settlement of the crisis. First of all, it would be difficult to envision the simultaneous existence of the Monitor, similar to a commissioner or bankruptcy trustee, and that of the Expert, whose role certainly cannot be equated to an auxiliary of justice since it acts as a facilitator in negotiations between the debtor, the creditors and any third party. Furthermore, the rules of the negotiated settlement of the crisis are not entirely consistent with the subsequent and mandatory liquidation phase since, following discussions between the debtor, creditors and any other interested party, they also provide for possible “landings” within the scope of debt restructuring aimed at the recovery of the company, which are therefore unrelated to the said liquidation phase.
In the author’s opinion, the pre-pack, as outlined in the Proposal for a Directive, is unlikely to be introduced into the negotiated settlement of the crisis. First of all, it would be difficult to envision the simultaneous existence of the Monitor, similar to a commissioner or bankruptcy trustee, and that of the Expert, whose role certainly cannot be equated to an auxiliary of justice since it acts as a facilitator in negotiations between the debtor, the creditors and any third party. Furthermore, the rules of the negotiated settlement of the crisis are not entirely consistent with the subsequent and mandatory liquidation phase since, following discussions between the debtor, creditors and any other interested party, they also provide for possible “landings” within the scope of debt restructuring aimed at the recovery of the company, which are therefore unrelated to the said liquidation phase.
Likewise, the mechanism appears difficult to reconcile even when incorporated into a simplified composition with the creditors, which, as a last resort to judicial liquidation, is characterized by a divestment plan that, even when organized as a whole for the company or a branch thereof, always follows the negotiated settlement of the crisis, given that it must be filed simultaneously with the appeal, never preceding it, whereas the preparation phase in the pre-pack was conceived as anticipating the liquidation phase.
The mechanism in question should not fare any better in the event of a debt restructuring agreement that provides for business continuity, on the assumption that the phase following the preparation phase is necessarily liquidation. Indeed, the outcome would appear to be different in the case of a purely liquidation agreement, where there should be no obstacles to considering a petition for approval preceded by a preparation phase for the sale of the production complex or a branch thereof.
The same considerations could also be extended to liquidatory composition with creditors, compulsory administrative liquidation, and the extraordinary administration of large companies in crisis, despite the fact that the latter procedure is currently regulated outside the Italian Business Crisis and Insolvency Code.
The indirect business continuity composition with creditors, however, deserves a separate discussion. The implementation of the pre-packmechanism will inevitably pose a clear coordination problem with its current legislation, particularly with Article 84, paragraph 2, of Italian Business Crisis and Insolvency Code, which classifies the transfer of a production complex as a type of indirect business continuity composition with creditors in which the business is managed, after the sale, by a party different form the debtor, with the liquidation of any other assets, even if significant, being irrelevant. While it is true that in this latter circumstance, business continuity is quite unique, in that it exists until the business complex’s circulation is finalized, subsequently resulting in a sort of liquidation that will lead – except in the case where one branch of the business is sold and the other continues – to the definitive dissolution of the entity. However, it is equally clear that the sale of the production complex is unlikely to constitute both a type of arrangement for business continuity, with its own specific rules, and a liquidation phase that is part of a liquidation arrangement procedure characterized by rules that are not always entirely overlapping with the former. In both circumstances, in fact, there would be a single final outcome: the dissolution of the entity. However, the current rules governing liquidation arrangements, as is well known, differ in several aspects from those governing arrangement for business continuity, thus creating a clear fundamental conflict.
On the other hand, the preparation and liquidation phases can be implemented, respectively, before and after the commencement of judicial liquidation, without requiring the introduction of a new procedure. Indeed, if the previously negotiated sale is authorized and executed in the subsequent insolvency proceedings — in which the liquidation phase is implemented, which constitutes a true insolvency proceeding, distinct from a preventive restructuring pursuant to Article 20, paragraph 1, of the Proposal for a Directive – then it is reasonable to assume that the previous phase could be excluded from a strict insolvency framework, as it is merely a preparatory mechanism for the subsequent transfer of the production complex.
However, the preparation phase, presupposing a subsequent collective liquidation procedure, can likely only be initiated if the debtor intends to file for judicial liquidation on its own or resort to composition proceedings in the presence of a state of insolvency or request the approval of a liquidation debt restructuring agreement. The mechanism cannot be left to the debtor’s discretion and therefore cannot be interrupted by a simple waiver before the start of the liquidation phase. In other words, when the debtor requests the appointment of a Monitor, it should already be aware that is accessing a liquidation procedure and not a restructuring procedure [73].
This appears, among other things, to be consistent with the timeframe – three months from the date of knowledge of insolvency – required to directors for the purpose of the obligation to initiate insolvency proceedings pursuant to Article 36 of the Proposal for a Directive. This is a rewarding incentive for the administrative body that, by submitting a timely request for the appointment of the Monitor, will ultimately avail itself of this option for the purpose of exemption from liability for any damage caused to the creditors.
However, the domestic legislator will have to deal with the transition between the preparation and liquidation phases, as well as with the verification of the relevant objective and subjective conditions for access to the latter, since the Proposal has indicated the guidelines and the relevant aspects of the pre-pack but, at the same time, has given freedom to the Member States to dictate the discipline during the implementation stage, albeit in line with the spirit of the Directive [74].
Finally, a brief reflection deserves to be dedicated to the need for coordination between the current provisions of the Italian Business Crisis and Insolvency Code and the provision according to which it is not excluded – in compliance with Recital 22 – that the debtor may continue the business activity after the liquidation phase with the remaining part of the company.
While this is absolutely typical of the composition with creditors procedure or of debt restructuring agreements in which a branch of the company is sold – except in the first case to call into question, as specified above, whether it is actually a case of indirect business continuity – a similar provision is found in the current Italian legal system in the context of judicial liquidation where Article 232, paragraph 2, Italian Business Crisis and Insolvency Code provides that, when this is closed due to the absence of requests for admission to the liabilities or due to the full satisfaction of the creditors (i.e. in the cases provided for by law under letters a) and b) of Article 233, paragraph 1, Italian Business Crisis and Insolvency Code), rather than proceeding with the request for cancellation of the company from the Company Register, the bankruptcy trustee is required, since it is not a mere option, but an obligation, to convene the ordinary meeting of the shareholders to take the resolutions necessary for the purposes of resuming the economic activity – feasible on the assumption that there are no applicant or unsatisfied creditors [75] – or for its definitive cessation or for any matter to be discussed whose inclusion in the agenda is requested in writing by members representing at least twenty percent of the share capital.
8 . Employment Law protections in the pre-pack mechanism
Having reached the conclusion of this contribution, it is worth making some systemic considerations regarding the impact that the introduction of the pre-pack mechanism in the domestic legal system could have on Employment Law.
The explanatory Report to the original Proposal for a Directive already makes it clear that the content of the latter is consistent with Council Directive 2001/23/EC of 12th March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees’ rights in the event of transfers of undertaking, businesses or parts thereof [76].
In particular, Article 20, paragraph 2, of the Proposal, in its current version, establishes that the Directive of 2001 and national implementing provisions remain unaffected and continues, in the second sentence, by establishing that when the liquidation phase takes place within proceedings characterized by the cessation of economic activity and the consequent loss by the debtor of ownership of the business assets that are transferred for the purpose of satisfying the creditors, the same – for the purposes of Article 5, paragraph 1, of Council Directive 2001/23/EC – must be considered as bankruptcy proceedings or any other similar insolvency proceedings initiated with the aim of disposing the assets’ divestment under the supervision of a competent public authority.
The first consequence of this provision is that it thus becomes completely irrelevant, with regard to employment law protections and the related exceptions, whether the sale process was initiated in the preparation phase rather than in the liquidation phase, since the implementation of the pre-pack is in any case reserved for the latter and placed in a procedural context having purposes other than mere restructuring.
In this regard, it is worth recalling that Article 5, paragraph 1, of the aforementioned Directive of 2001 establishes that, unless otherwise provided by the Member States, Articles 3 and 4 on the maintenance of workers’ rights, in the event of a transfer of ownership of the company or a branch thereof, do not apply if the transferor is subject to judicial liquidation or similar insolvency proceedings opened with a view to the sale of its assets and which are carried out under the supervision of a competent public authority or of the insolvency practioner authorised by the latter [77]. In fact, while the aforementioned Articles 3 and 4 establish that the rights and obligations resulting for the transferor from a contract or from an employment relationship existing at the date of the transfer are, as a consequence of the latter, transferred to the transferee, and that such transfer of ownership – irrelevant whether it concerns a factory or a part of it – is not in itself a reason for dismissal by the transferor or the transferee, the subsequent Article 5 deals with the exception to the aforementioned rule in the event of bankruptcy proceedings or analogous insolvency proceedings having the purpose of liquidating the debtor’s assets and not merely of restructuring [78]. In other words and ultimately, in compliance with Directive 2001/23/EC, dismissals are to be considered illegitimate when carried out by a person subject to restructuring proceedings and indeed lawful – with the consequent sacrificing of employment levels – when the circulation of the production complex takes place within the context of a procedure with liquidation characteristics.
This is also in line with the ruling of the Court of Justice of the European Union in the Heiploeg case [79], which, as is known, was given in a case relating to a pre-pack opened in The Netherlands and has identified two principles of absolute importance in the matter.
This is also in line with the ruling of the Court of Justice of the European Union in the Heiploeg case [79], which, as is known, was given in a case relating to a pre-pack opened in The Netherlands and has identified two principles of absolute importance in the matter.
The first concerns the fact that Article 5, paragraph 1, of Directive 2001/23 must be interpreted that the condition set out therein – according to which Articles 3 and 4 of that Directive do not apply to the transfer of a company in the event that the transferor is the subject of bankruptcy or similar insolvency proceedings opened with a view to the liquidation of the transferor’s assets – is satisfied even if the transfer was arranged prior to the opening of the proceedings aimed at the transfer of the transferor’s assets, provided that it is carried out during the insolvency proceedings within the context of a pre-pack procedure governed by legislative and regulatory provisions having the primary objective of allowing for the best possible satisfaction of all creditors, while maintaining, as far as possible, employment. By doing so, the Court of Justice of the European Union has ended up recognizing the liquidation nature of the pre-pack, placing the protection of the creditor class at the centre of its interests – as in all insolvency proceedings aimed at the disposal of assets – while at the same time seeking to safeguard, as far as possible, employment relationships.
The second principle specifies that Article 5, paragraph 1, of Directive 2001/23 must be interpreted that the prerequisite therein applies even where the transfer of all or part of the production complex is arranged as part of a pre-pack procedure prior to the declaration of bankruptcy by an insolvency practitioner specifically nominated, subject, in turn, to the supervision of a designated delegated judge, even if the agreement about the sale is executed after the opening of the bankruptcy proceedings aimed at the liquidation of the transferor’s assets.
Therefore, in accordance with the provisions of Article 20, paragraph 2, of the Proposal, in the case of a pre-pack and taking into account the case law of the Court of Justice, neither the mandatory succession of the transferee in employment debts pursuant to Article 3 of Directive 2001/23/EC nor the impediment due to dismissal pursuant to Article 4 should apply, unless Member States provide otherwise in accordance with Article 5 of the latter Directive, each Country being free to establish specific guarantees to protect employment [80].
Nevertheless Recital 22 bis of the current version of the Proposal would appear to diverge from this direction. Although it states that the objective of the pre-pack is to allow, in the interests of creditors and within the context of insolvency proceedings, a liquidation of the debtor’s assets through the transfer of all or part of the business as a going concern in order to satisfy, to the fullest extent possible, the claims of all creditors, it also provides that the mechanism under consideration may nevertheless contribute to safeguarding employment, thereby averting the threat of a significant sacrifice in terms of employees’ right to retain their jobs.
Likewise, Article 68 ter of the Proposal itself, in indicating that Member States shall ensure that Title IV leaves workers’s collective rights established by Union and national legislation unaffected, would in reality appear to conflict with the principles contained in Article 5 of Directive 2001/23/EC, to which Article 20, paragraph 2, of the Proposal for a Directive refers.
Likewise, Article 68 ter of the Proposal itself, in indicating that Member States shall ensure that Title IV leaves workers’s collective rights established by Union and national legislation unaffected, would in reality appear to conflict with the principles contained in Article 5 of Directive 2001/23/EC, to which Article 20, paragraph 2, of the Proposal for a Directive refers.
Furthermore, the protection of employees must be achieved regardless of any possible derogation by Member States from the principle contained in Article 5 of Directive 2001/23/EC. This appears to be evident from the provisions of Article 28 of the Proposal, which establishes, with regard to employees’ claims, the applicability of the rule – guarded in our legal system in Article 2112 of the Italian Civil Code – according to which the transferor’s obligations arising from the employment relationships affected by the company’s circulation remain in place.
In light of this, the Proposal for a Directive, if implemented, would have significant consequences for domestic law, which has long preferred to introduce specific guarantees to protect employed workers, even in the case of liquidation proceedings, making use of the specific provision in Article 5 of Directive 2001/23/EC, which aims to extend the prerogatives set forth in the previous Articles 3 and 4 to such liquidatory procedures. These protections correspond, under national law, to the provisions of Article 2112 of the Italian Civil Code.
In this regard, in accordance with the aforementioned power reserved to Member States by Article 5 of Directive 2001/23/EC, the Italian legislator has intervened – pursuant to Article 368 of the Italian Business Crisis and Insolvency Code – on the provisions of Article 47 of Law no. 428/1990, amending it to reiterate, among other things, that in liquidation proceedings, Article 2112 of the Italian Civil Code may be derogated only under certain conditions.
In this regard, in accordance with the aforementioned power reserved to Member States by Article 5 of Directive 2001/23/EC, the Italian legislator has intervened – pursuant to Article 368 of the Italian Business Crisis and Insolvency Code – on the provisions of Article 47 of Law no. 428/1990, amending it to reiterate, among other things, that in liquidation proceedings, Article 2112 of the Italian Civil Code may be derogated only under certain conditions.
More specifically, paragraph 5 of Article 47 of Law no. 428/1990 establishes that, if the transfer concerns companies that have been placed under judicial liquidation or have entered into a liquidatory composition with creditors, or have been ordered to enter compulsory administrative liquidation, and if the continuation of the business has not been ordered or has ceased, the employment relationship continues with the transferee. However, in such a circumstance, during the consultations governed by the previous paragraphs of the provision under exam, collective agreements may still be stipulated, for the purpose of safeguarding employment, pursuant to Article 51 of Legislative Decree No. 81 of 15th June 2015, in derogation from Article 2112, paragraphs 1, 3 and 4, of the Italian Civil Code. This last exception was in fact introduced to encourage the maintenance, even partial, of employment levels, which, if the transfer had not taken place, would have been significantly penalised by the dismissal.
Furthermore, with particular regard to judicial liquidation, since Article 189, paragraph 1, Italian Business Crisis and Insolvency Code, provides that employment relationships in place at the date of the declaratory judgment are suspended until the bankruptcy trustee, with prior authorization from the delegated judge and after hearing the creditors’ committee, informs the workers that it will take over, assuming the related obligations [81], or about the withdrawal, it is highly likely that, in the event of a pre-pac , the bankruptcy trustee will end up taking over such relationships for the purposes of the transfer of the company or branch of which they are part if they fall within the scope of the agreement between the debtor and the offeror who triggered the mechanism, with Article 191 Italian Business Crisis and Insolvency Code applying to the related circulation of the company which refers, in turn, to the provisions of Article 47 Law no. 428/1990.
Otherwise, without prejudice to the transfer of employment relationships to the transferee, paragraph 4-bis of Article 47 of Law no. 428/1990 provides that, in the event that an agreement is reached during the consultations provided for in the previous paragraphs, with the aim of protecting employment, Article 2112 of the Italian Civil Code applies, with regard to working conditions, within the terms and with the limitations set forth in the agreement itself, to be also concluded through the collective agreements referred to in Article 51 of Legislative Decree 15th June 2015, no. 81, if the transfer concerns companies subject to an indirect continuity composition with creditors procedure and, therefore, for the purpose of restructuring.
Ultimately, while paragraph 5 of Article 47 of Law no. 428/1990 incorporates the exception that Article 5 of Directive 2001/23/EC reserves for Member States in order to apply, at least in part, Article 2112 of the Italian Civil Code also to transfers within the scope of liquidation proceedings, the previous Article 4 bis of Article 47 of Law no. 428/1990, in line with employment law protections put in place by Articles 3 and 4 of Directive 2001/23/EC, extends to restructuring and recovery measures.
However, it is true that, in the event of the adoption of the Proposal for a Directive, it would be difficult to conceive that, for the same phase – the pre-pack liquidation phase – employment relationships would end up being treated differently depending on whether it is implemented within the framework of judicial liquidation or another liquidation procedure, to which the provisions of paragraph 5 of the same Article 47 of Law no. 428/1990 correspond, or of the composition with creditors for indirect business continuity, for which paragraph 4-bis of Article 47 of Law no. 428/1990 is relevant.
Consequently, this will make it almost necessary to carry out a necessary systematic review of the provisions contained in the latter article – presumably also qualifying the composition with creditors for indirect business continuity as a liquidation procedure, thus also resolving the coordination problems already highlighted in paragraph 7 above – in order to implement the necessary coordination between the various domestic provisions in compliance with the EU Directives.
Note:
[1]
Expressed himself in terms of a natural continuation between the two acts also K. Silvestri, La proposta di direttiva del Parlamento europeo e del Consiglio sull’armonizzazione di taluni aspetti del diritto dell’insolvenza, in Dirittodellacrisi.it, 2023, 2.
[3]
In this regard – as observed by C. Cavallini, La conservazione del patrimonio dell’impresa insolvente e le nuove sollecitazioni dall’Europa. “Provocazioni” sulla revocatoria dicharativa, in Riv. delle società, 2023, 746 – the European Union itself has ascertained that the preventive restructuring regulation alone is not exhaustive with respect to the issue of business crisis and insolvency, given that economic and financial difficulties must be regulated differently on the basis of different parameters of evaluation, having in fact produced «dissonances in the individual internal legislations».
[4]
Highlights the importance of the effectiveness of the recovery of investments by foreign creditors compared to those who operate exclusively on the domestic market of each Member State C. Cavallini, Ibidem.
On the need to remove uncertainty for investors regarding the timing of recovery of invested sums, see P. De Cesari, La Proposta di direttiva sull’armonizzazione di taluni aspetti del diritto dell’insolvenza, riflessi sul Codice della crisi, in Fall., 2023, 582. See also A. Patti, L’affitto d’azienda nella liquidazione giudiziale, in Fall., 2023, 1212.
More recently, see M. Ferro, Il completamento della prima fase della riforma concorsuale: il punto tra diritto interno e diritto europeo, in Procedure concorsuali e crisi d’impresa, 2025, 10, according to which the objective of the Proposal concerns investment certainty, reduced costs for cross-border investments and greater attractiveness of risk capital for businesses. The Author (see page 12) also recalls that the choice to use the harmonization directive instrument entails minimum standards valid for each State, interventions in specific areas of insolvency, and the power for Member States to introduce new measures or maintain existing ones if they comply with the objectives of the Directive.
[5]
Underlines the EU objective of improving the outcomes of insolvency procedures, in order to achieve a higher result for creditors, A. Bassi, Brevi note sulla Proposta di Direttiva UE 7.12.2022 che armonizza «taluni aspetti del diritto in materia di insolvenza», in Giur. comm., 2024, 245.
[6]
For a more in-depth analysis of the relevant provisions contained in Title II of the Proposal, see L. Panzani, Osservazioni ragionate sulla proposta di nuova Direttiva di armonizzazione delle leggi sull’insolvenza, in Dirittodellacrisi.it, 2023, 2 et seq.; K. Silvestri , op. cit., 5 et seq.; L. De Bernardin, Non l’abbiamo vista arrivare: brevi riflessioni sulle ripercussioni della nuova proposta di direttiva in materia di insolvenza sulle procedure liquidatorie in Italia, in Dirittodellacrisi.it, 2023, 7; P. De Cesari, op. cit., 583 ff.; C. Cavallini, op. cit., 748 et seq.; A. Bassi, op. cit., 245 et seq.; S. Fortunato, La revocatoria concorsuale nella proposta di direttiva unionale del 7 dicembre 2022, in Giur. comm.,2024, 1110 et seq.; M. Ferro, op. cit., 11 and 12; E. Ricciardiello, Azione revocatoria: appunti a margine della proposta di direttiva Insolvency II, in Dir. fall., 98 et seq.
[8]
See on this point L. Panzani, op. cit., 28 et seq.; K. Silvestri, op. cit., 23 et seq.; P. De Cesari, op. cit., 588 et seq.
[9]
See again L. Panzani, op. cit., 26 et seq.; K. Silvestri, op. cit., 20 et seq.; P. De Cesari, op. cit., 595 et seq.
For the sake of completeness, it should be noted that in the original version the Proposal also provided for simplified rules for the winding-up of insolvent microenterprises – for further information see L. Panzani, op. cit., 15 et seq.; K. Silvestri, op. cit., 16 et seq.; L. De Bernardin, op. cit., 2 et seq.; A. Patti, op. cit., 1212 and 1218; P. De Cesari, op. cit., 593 et seq.; A. Bassi, op. cit., 246, 248 and 249; CNDCEC and FNC, La continua evoluzione del diritto concorsuale: una nuova proposta di Direttiva UE, in https://commercialisti.it/documenti-studio/la-continua-evoluzione-del-diritto-concorsuale-una-nuova-proposta-di-direttiva-ue/, 2024, 9 et seq.; M. Ferro, op. cit., 12 – which were indeed excluded from the text resulting from the latest version of 12th June 2025.
For the sake of completeness, it should be noted that in the original version the Proposal also provided for simplified rules for the winding-up of insolvent microenterprises – for further information see L. Panzani, op. cit., 15 et seq.; K. Silvestri, op. cit., 16 et seq.; L. De Bernardin, op. cit., 2 et seq.; A. Patti, op. cit., 1212 and 1218; P. De Cesari, op. cit., 593 et seq.; A. Bassi, op. cit., 246, 248 and 249; CNDCEC and FNC, La continua evoluzione del diritto concorsuale: una nuova proposta di Direttiva UE, in https://commercialisti.it/documenti-studio/la-continua-evoluzione-del-diritto-concorsuale-una-nuova-proposta-di-direttiva-ue/, 2024, 9 et seq.; M. Ferro, op. cit., 12 – which were indeed excluded from the text resulting from the latest version of 12th June 2025.
[10]
On the topic, see L. Panzani, op. cit., 7 et seq.; Idem, Le condizioni per un negoziato fruttuoso nel terreno minato della crisi dichiarata dal debitore e autogestita dai soggetti coinvolti, in Dirittodellacrisi.it, 2024, 2 et seq.; P. De Cesari, op. cit., 589 et seq.; A. Patti, op. cit., 1216 et seq.; M. Ferro, Le vendite nella fase preconcorsuale e la transizione verso i pre-pack, in Procedure concorsuali e crisi d’impresa, 2023, 1178 and 1187 et seq.; Idem, Il completamento, cit., 12 and 13; A. Bassi, op. cit., 246; CNDCEC and FNC, op. cit., 29 et seq.
[11]
Recalling that the Proposal for a Directive under consideration is based on Article 114 TFEU as the legal basis that enables the European Parliament and the Council to adopt, acting in accordance with the ordinary legislative procedure, regulations, directives or decisions aimed at «approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market», it is recalled that the opinion of the European Data Protection Supervisor of 6th February 2023 and that of the European Economic and Social Committee of 24th March 2023 were initially acquired.
[12]
See https://eur-lex.europa.eu/IT/legal-content/glossary/trilogue.html
For a more in-depth analysis of the trilogue mechanism, see G. Rugge, Il ruolo dei triloghi nel processo legislativo dell’UE, in Il Diritto dell’Unione Europea, 2015, 809 et seq.
[13]
Which is an adjustment tool introduced by Law No. 234 of 24th December 2012, implementing a comprehensive reform of the rules governing Italy’s participation in the formation and implementation of European Union legislation and policies. See https://www.affarieuropei.gov.it/it/normativa/legge-di-delegazione-europea.
[14]
For an excursus on the topic, in broad terms, see A. Gurrea-Martínez, The rise of pre-packs as a restructuring tool: Theory, evidence and policy, in European Business Organization Law Review, 2021, 2 et seq.
[15]
See, on the subject, J. HM Sprayregen, et al., Need for Speed: Utilizing Hybrid Solicitation Strategies to Shorten Ch. 11 Cases, in 24 BBLR 1351, 2012, 1 et seq.; D.A. Meloro, R.G. Reese, T.K. Vandell, The Fast and Laborious: Chapter 11 Case Trends, in ABI Journal, 2014; D. G. Baird, The Elements of Bankruptcy,seventh edition, Foundation Press, 2022, 245 et seq.; D.F. Dunne, D.C. O’Donnell, N. Almeida, The Art of the Pre-Pack – Edition 2 – Prepackaged Chapter 11 in the United States: An Overview, in GRR, 2024, 1 et seq.
There are numerous rulings by US Courts on this point. Among the many, see In re Crystal Oil Co., Case No. 86-02834 (Bankr. W.D. La. 1986); In re Anglo Energy, Inc., Case No. 88-B-10360 (BRL) (Bankr. S.D.N.Y. 22 February 1988); In re Circle Express, Inc., Case No. 90-07980 (RLB) (Bankr. D. Ind. 1990); In re La Salle Energy Corp., Case No. 90-05508-H3-11 (LC) (Bankr. S.D. Tex. 1990); In re Southland Corp., Case No. 390-37119-11 (Bankr. N.D. Tex. 1990); In re JPS Textile Group, Inc., Case No. 91-B-10546 (JAG) (Bankr. S.D.N.Y. 1991; In re MB Holdings, Inc., Case No. 91-B-15617 (BRL) (Bankr. S.D.N.Y. 1992); In re Memorex Telex N.V. & Memorex Telex Corp., Case No. 92-8 (Bankr. D. Del. 7 February 1992); In re Pioneer Fin. Corp., Case No. 99-11404 (LBR) (Bankr. D. Nev. 22 May 2000); In re Choice One Communication, Inc., Case No. 04-16433 (RDD) (Bankr. S.D.N.Y. 2004); In re MTS, Inc., Case No. 04-10394 (PJW) (Bankr. D. Del. 2004); In re IWO Holdings, Inc., Case No. 05-10009 (PJW) (Bankr. D. Del. 16 March 2005); In re Blue Bird Body Co., Case No. 06-50026 (GWZ) (Bankr. D. Nev. 26 January 2006); In re InSight Health Servs. Holdings Corp., Case No. 07-10700 (BLS) (Bankr. D. Del. 10 July 2007); In re JGW Holdco, LLC, Case No. 09-11731 (CSS) (Bankr. D. Del. 1 June 2009); In re True Temper Sports, Inc., Case No. 09-13446 (PJW) (Bankr. D. Del. 30 November 2009); In re Elec. Components Int’l, Inc., Case No. 10-11054 (KJC) (Bankr. D. Del. 2010); In re Southcross Holdings, LP, Case No. 16-20111 (CSS) (Bankr. S.D. Tex. 11 April 2016); In re Roust Corp., Case No. 16-23786 (RDD) (Bankr. S.D.N.Y. 10 January 2017); In re Global A&T Electronics Ltd., Case No. 17-23931 (RDD) (Bankr. S.D.N.Y. 25 January 2018); In re Rand Logistics, Inc., Case No. 18-10175 (BLS) (Bankr. D. Del. 28 February 2018); In re Remington Outdoor Co., Inc., Case No. 18-10684 (BLS) (Bankr. D. Del. 4 May 2018); In re Mattress Firm, Inc., Case No. 18-12241 (CSS) (Bankr. D. Del. 16 November 2018); In re Gastar Exploration Inc., Case No. 18-36057 (MI) (Bankr. S.D. Tex. 20 December 2018); In re David’s Bridal, Inc., Case No. 18-12635 (LSS) (Bankr. D. Del. 4 January 2019); In re Arsenal Energy Holdings LLC, Case No. 19-10226 (BLS) (Bankr. D. Del. 13 February 2019); In re Seegrid Corp., Case No. 14-12391 (MFW) (Bank. D. Del. 20 January 2018); In re Sungard Availability Servs Capital, Inc., Case No. 19-22915 (RDD) (Bankr. S.D.N.Y. 2 May 2019).
[16]
See M. Nied, N. Levine, Pre- Packaged Sales Transactions under the CCAA: Where are These Packages From, What do They Look Like, and Where are They Going?, in J.P. Sarra, B. Romaine, eds., Annual Review of Insolvency Law 2016 (Toronto, Carswell, 2017), 89.
[17]
See P. Walton, When is pre-packaged administration appropriate? A theoretical consideration, in Nottingham Law Journal, 20, 2011, 1 et seq.; M. Wellard, P. Walton, A comparative analysis of Anglo-Australian prepacks: Can the means be made to justify the ends?, in International Insolvency Review, 2012, 143 et seq.; J. Armour, The rise of the “pre-pack”: corporate restructuring in the UK and proposals for reform, in RP Austin and Fady JG Aoun, Restructuring Companies in Troubled Times: Director and Creditor Perspectives, 43-78. (Sydney: Ross Parsons Centre, 2012), 1 et seq.;J. Ingram, D. Odetola, The Art of the Pre-Pack – Edition 2 – Cayman Islands, in GRR, 2024, 1 et seq.
[18]
On this topic see at length D. Baxter, B. O’Malley, The Art of the Pre-Pack – Edition 2 – Ireland, in GRR, 2024, 2.
[19]
In particular, the rule is contained in Article 224-bis of Ley Concursal, named “Solicitud de concurso con presentación de oferta de adquisición de una o varias unidades productivas”, published in Boletin Oficial del Estado (BOE), n. 214 of 9th September 2022. As recalled by P. De Cesari, Al via in Spagna la nuova “reforma concursal”, in Fall., 2023, 173 and 174, the law provides that a debtor facing an imminent or current probability of insolvency may submit, with the application to open insolvency proceedings, a binding offer for the purchase of one or more of the company’s production units, formulated by a third party or a creditor. The latter must undertake to continue, pursue or restart the business for at least three years. It is understood that once the insolvency proceeding is open, alternative offers may be received, and the most advantageous must then be chosen, also taking into account the preservation of business continuity and job security. The Author continues – on page 174 – by recalling that Article 224 ter of Ley Concursal establishes that the debtor may request the judge to appoint an expert to collect the offers. Nevertheless, pursuant to Article 224 quinquies, it does not exempt the entrepreneur from the obligation to file for the purposes of declaring the insolvency within two months following the date on which it became aware or should have become aware of the current state of insolvency. Still on the content of Article 224 bis et seq. of Spanish Ley Concursal see L. Panzani, Le condizioni, cit., 3 and 4. For a review of the pre-pack mechanism in the Spanish legal system see also J. Flaquer Riotort, La venta de unidad productiva de la empresa en crisis, Especial referencia al mecanismo de prepack concursal, in InDret, 2023, 101 et seq., where further references are referred to.
[20]
For a detailed discussion of the instrument in French law S. Golshani, A. Hojabr, The Art of the Pre-Pack – Edition 2 – France, in GRR, 2024, 1 et seq.
[21]
See on this topic S. Schelo, M. Rickert, The Pre-Pack Procedure – Deutscher AnwaltSpiegel, in Restructuring Business, 2023, 1 et seq.
[22]
See Potamitis-Vekris, In brief: liquidation and reorganisation processes in Greece, in Lexology Panoramic, 2022, 5.
[23]
As regulated by Title V/III of Book XX of the Belgian Code of Economic Law on the case of “preparation privée d’une faillite”.
[24]
As further detailed in the ruling of the Court of Justice of the European Union, 28th April 2022, Case C-237/20, Federatie Nederlandse Vakbeweging/Heiploeg Seafood International BV, in Foro.it, 2022, 481.
[25]
In that Country, pre-pack is used in practice but without a legislative framework. See in this regard P. Stallebrass, Pre-pack insolvency sale in the Czech Republic: Current situation and outlook, in CMS Law-Now, 2023, 1 et seq.
[26]
See extensively B. Vakil, N.T. Desai, S. Thakkar, N. Sharma, S. Shivdikar, The Art of the Pre-Pack – Edition 2 – India, in GRR, 2024, 1 et seq.
[28]
See funditus C. Harlowe, C. Levers, The Art of the Pre-Pack – Edition 2 – Cayman Islands, in GRR, 2024, 1 et seq.
[29]
See on the topic D. Emmett, h. Cooper, The Art of the Pre-Pack – Edition 2 – Australia, in GRR, 2024, 1 et seq.
[30]
Concerned by L. Tang, J. Tanner, C.Y. Ooi, The Art of the Pre-Pack – Edition 2 – Singapore, in GRR, 2024, 1 et seq. See also D. Lim, Singapore’s First “PrePackaged” Scheme of Arrangement, in Singapore Global Restructuring Initiative, 2021, 1 et seq.
[31]
Described by P. De Cesari, La Proposta di direttiva, cit., 583, as «autonomous concepts, specific to the European Union, which, as usual, are provided for in order to avoid interpretations based on different national legal systems».
[33]
Confirmation of what has just been stated can be found in Article 20 of the Proposal for a Directive, where the EU legislator specifies that the liquidation phase is carried out through insolvency procedures other than preventive restructuring operations, with particular reference to those referred to in Annex A of Regulation (EU) 2015/848, where the latter applies, as in our Country.
[35]
For a general analysis of the legal value of the “recitals” in European Union law, see. T. Klimas, J. Vaičiukaitė, The Law of Recitals in European Community Legislation, in ILSA Journal of Int’l & Comparative Law, 2008, 1 et seq.
Similar considerations can be found in the Joint Practical Guide of the European Parliament, the Council and the Commission for the Drafting of European Union Legislative Texts, at https://eur-lex.europa.eu/content/techleg/KB0213228ITN.pdf, 2015, 31 and 32.
[36]
On this concept, see extensively J. Esser, Precomprensione e scelta del metodo nel processo di individuazione del diritto. Fodamenti di razionalità nella prassi decisionale del giudice, trad. it., Napoli, Esi, 1983, passim and, in particular, 132 et seq. The importance of this phenomenon has also been taken up and emphasized by G. Zaccaria, Ermeneutica e giurisprudenza. Saggio sulla metodologia di Josif Esser, Milano, Giuffré, 1984, 158 et seq.; Idem, Come interpretare? La buona e la cattiva interpretazione, in F. Viola-G. Zaccaria, Diritto e interpretazione. Lineamenti di teoria ermeneutica del diritto, Roma-Bari, Laterza, 1999, 187 et seq. e 232 et seq.; M. Ferraris, Non ci sono gatti, solo interpretazioni, in Aa.Vv., Diritto, giustizia e interpretazione, edited by J. Derrida and G. Vattimo, coordinated by M. Bussani, Roma-Bari, Laterza, 1998, 129 et seq.; as well as by F. Viola, La filosofia ermeneutica del diritto, in F. Viola-G. Zaccaria, Diritto e interpretazione. Lineamenti di teoria ermeneutica del diritto, Roma-Bari, Laterza, 1999, 329. For a more recent and contemporary approach, see also F. Petrillo, Interpretazione degli atti giuridici e correzione ermeneutica, Torino, Giappichelli, 2011, 9 et seq., who has especially explored the concept of critical pre-understanding.
[37]
See D. Canale, La precomprensione dell’interprete è arbitraria?, in Etica & Politica/Ethics & Politics, 2006, 1, 4.
[38]
In these exact terms, see F. Viola, Ermeneutica filosofica, pluralismo e diritto, in Etica & Politica/Ethics & Politics, 2006, 1, 2.
[40]
In this regard F. Viola, La filosofia ermeneutica del diritto, cit., 439, is right on target, where he textually stated that «every interpreter brings with him models instilled by his own tradition and culture».
[42]
These provisions are, in any case, intended to facilitate negotiations between debtors and creditors within the framework of a preventive restructuring plan. The total duration of the stay on individual enforcement actions, including extensions and renewals, cannot exceed twelve months.
[46]
See in this sense P. De Cesari, La Proposta di direttiva, cit., 590.
The introduction of the pre-pack aims, in fact, to reduce the time required for insolvency proceedings and consequently for the recovery of sums by creditors. See K. Silvestri, op. et loc. supra cit. CNDCEC and FNC, op. cit., 29 and 30, expressed themselves similarly, also stating (see page 35) that the objectives of the pre-pack are aimed at minimizing the time required for realization and maximizing the value of the company.
[47]
See, in the original version of the Proposal for a Directive, L. Panzani, Le condizioni, cit., 2.
[49]
As also described by M. Ferro, Le vendite, cit., 1187; and A. Bassi, op. et loc. supra cit. For both Authors, in any case, it is a matter of an appointment by a judicial body. See also CNDCEC and FNC, op. cit., 32. Also in the opinion of L. Panzani, Osservazioni ragionate, cit., 9 – reiterated in Idem, Le condizioni, cit., 7 – the Monitor is appointed by the judge at the request of the debtor.
[51]
That is, any person or body carrying out one or more of the functions referred to in Article 2, point 5), of Regulation (EU) 2015/848 and for the so-called professional in the field of restructuring, in Article 2, paragraph 1, point 12), of Directive (EU) 2019/1023.
[52]
For the sake of completeness, it should be noted that the remuneration of the Monitor is delegated to the Member States, on the basis of national law, just as the latter must ensure that the aforementioned is liable for damages caused to creditors by its intentional or negligent failure to comply with the obligations set out in Title IV of the Proposal.
[53]
On which M. Ferro, Le vendite, cit., 1188, and L. Panzani, Osservazioni ragionate, cit., 9; Idem, Le condizioni, cit., 7, have also expressed their opinion.
According to CNDCEC and FNC, op. et loc. supra cit., the Monitor is, in fact, the main character in the preparation phase together with the debtor.
[54]
That is, on the basis of competitive rules defined, precisely with regard to the pre-pack, as «strict» by G. D'Attorre, I principi unificanti nei trasferimenti di valore nelle diverse soluzioni della crisi, in Dirittodellacrisi.it, 2025, 4.
[55]
In these exact terms see already M. Ferro, Le vendite, cit., 1187, with reference to the original version of the Proposal for a Directive.
[56]
A. Bassi, op. et loc. supra cit., also speaks of a contract negotiated confidentially between debtor and purchaser. M. Ferro, op. et loc. ult. cit., has previously emphasized the confidential nature of the preparation phase of the pre-pack. The concept is also expressed in nt. 13) of the Explanatory Memorandum to the Proposal for a Directive.
[57]
Article 288 TFEU provides that directives are binding, as to the result to be achieved, upon each Member State to which they are addressed, leaving national authorities the power to choose the form and means of achieving that aim. Therefore, unlike regulations, they are not directly applicable in the Member States but must first be transposed into national law. For a directive to have effect at the national level, the Member States of the European Union must therefore adopt a law to transpose it. The national measure must achieve the objectives imposed by the directive, and moreover within the deadline indicated at the time of its adoption.
[58]
See on the subject, already with regard to the previous version of the Proposal, M. Ferro, Le vendite, cit., 1189; L. Panzani, Osservazioni ragionate, cit., 10; Idem, Le condizioni, cit., 8, to which reference is also made for the explanation of the peculiar genesis of the expression stalking horse; as well as K. Silvestri, op. cit., 14.
[59]
In financial terms, it refers to a buyer who has agreed to submit a minimum bid prior to an auction held as part of a bankruptcy proceeding. See https://www.collinsdictionary.com/dictionary/english/stalking-horse
Examples of the stalking horse mechanism can be found, as far as the US legal system is concerned, in In re Ideanomics, Inc. et al., Case No. 24-12728 (CTG); In re First Mode Holdings, Inc., et al., Case No. 24-12794-KBO; In re Red Lobster Management LLC, Case No. 24-02486. With regard to Canada, see extensive references to J.L. Cameron, A. Mersich, and K. Wong, Saddle Up: The Rise of Stalking Horse Credit Bids in Canadian Insolvency. Proceedings, in 2023 CanLIIDocs 3089, 1 et seq.
[60]
Unlike to what happens in our legal system in the matter of competing offers governed by Article 163-bis of the Italian Bankruptcy Law – now Article 91 Italian Business Crisis and Insolvency Code – which can be subject, according to the prevailing opinion arised while the Italian Bankruptcy Law was in force, to conformity by the judge. In doctrine, on this point, emphasizing the circumstance for which the jus modificandi made by the court cannot affect all the elements of the original offer by distorting it, nor impact the content of the plan, see among others P.F. Censoni, La domanda e l’ammissione al concordato, in A. Jorio, B. Sassani, Trattato delle procedure concorsuali, IV, Milano, Giuffrè, 2016, 180, where he stated that the Court «should never intervene directly on the content of the debtor’s proposal»; A. La Malfa, Le offerte concorrenti, in www.osservatorio-oci.org, 2016, 10; Idem, Le offerte concorrenti, in S. Ambrosini (directed by), Fallimento, soluzioni negoziate della crisi e disciplina bancaria dopo le riforme del 2015 e del 2016, Bologna, Zanichelli, 2017, 357; C. Trapuzzano, Le offerte concorrenti: inquadramento dell’istituto e profili applicativi, in S. Ambrosini (directed by), Fallimento, soluzioni negoziate della crisi e disciplina bancaria dopo le riforme del 2015 e del 2016, Bologna, Zanichelli, 2017, 409 and 410; M.N. Legnaioli, La disciplina delle vendite: l’art. 182 e l’art. 163 bis l.f., in www.osservatorio-oci.org, 2017, 12; G. Meo, Appunti in tema di cessione dei beni nel concordato preventivo, in www.osservatorio-oci.org, 2017, 14 e 15; F. Bortolotti, L. Mandrioli, Le offerte concorrenti nel concordato preventivo: la disciplina dell’art. 163 bis l. fall. (Parte I), in Fall., 2018, 1340 and 1341; M. Aiello, La competitività nel concordato preventivo. Le proposte e le offerte concorrenti, Torino, Giappichelli, 2019, 245; F. Carosi, La disciplina delle offerte competitive nel concordato preventivo: tra la legge fallimentare e il Codice della Crisi d’Impresa e dell’Insolvenza, in Dir. fall., 2022, 947 and 948.
With reference to jurisprudence, see Trib. Alessandria, 22nd March 2016, in Ilcaso.it, Sez. Giurisprudenza, 15792 - pubb. 21/09/2016; Trib. Alessandria, 11th July 2018, in Banche dati Dejure; App. Sassari, 30th May 2019, in Giur. it., 2019, 2693, with note by A.D. Scano, Offerta iniziale e offerte concorrenti nel concordato preventivo “chiuso”; Trib. Vicenza, 12th July 2019, in http://www.ilcaso.it/giurisprudenza/archivio/22542.pdf; Trib. Brescia, 27th May 2021, in http://www.ilcaso.it/giurisprudenza/archivio/25458.pdf.
In accordance with Article 91 Italian Business Crisis and Insolvency Code, in the opinion of M. Aiello, Le nuove proposte e offerte competenti, in RistrutturazioniAziendali, 2024, 115, in text and in nt. 269, and 116, the judge’s action has been better limited by the legislator – which has not reintroduced the provisions of paragraph 3 of Article 163 bis of the Italian Bankruptcy Law on the obligation of the bidder to comply with the requirements of the decree opening the competitive procedure – to perform a function of guaranteeing real competitiveness by identifying the measures necessary for the comparability of the offers, without interfering with the content of the original one negotiated between the debtor and the bidder. Also V. Zanichelli, Art. 91 Offerte concorrenti, in S. Bonfatti, Commentario al Codice della Crisi d’impresa e dell’Insolvenza, Aggiornato al D. Lgs. 13 settembre 2024, n. 136, coordinated by G. Falcone, Pisa, Pacini Giuridica, 2025, 449, admitted that the court has a conforming power, even if limited to marginal changes to the initial offer, which however the judicial authority must consider inadmissible where it cannot be improved without distorting its content.
[61]
These are the aspects which M. Ferro, Le vendite, cit., 1188, also focused on. Nonetheless, CNDCEC and FNC, op. cit., 36, highlight how this provision is an expression of the «overcoming of afflictive rules» for the debtor in order to optimise the objectives of the circulation of companies, whilst always respecting competition, fairness and third-party nature.
[62]
Which M. Ferro, Le vendite, cit., 1189, has defined as an «imperative limit» that the Member States will translate «into a balanced rule of participation in the sale».
[64]
For M. Ferro, Le vendite, cit., 1188, the circumstance that the transfer can be implemented «free» from the transferor’s debts represents a real «incentive for third parties».
[65]
On the subject, see in general D. Rubino, La compravendita, in Trattato di diritto civile e commerciale, edited by A. Cicu - F. Messineo, XXIII, Milan, Giuffré, 1962, 159; M. Cian, Trasferimento d’azienda e successione nei rapporti rappresentativi, Milano, Giuffré, 1999, 247 et seq.; F. Galgano, Diritto civile e commerciale. L’impresa e le società, III, I, L’impresa, le società in genere, le società di persone, Padova, Cedam, 1999, 98; F. Ferrara Jr.- F. Corsi, Gli imprenditori e le società, Milano, Giuffré, 1999, 170; G.F. Campobasso, Diritto commerciale. 1. Diritto dell’impresa, Torino, Utet, 2006, 155; G.U. Tedeschi, L’azienda, in Impresa e lavoro, V, in Trattato di diritto privato, diretto da P. Rescigno, Torino, Utet, 2012, 110.
The expression used by U. Minneci, Imputazione e responsabilità in ordine ai debiti relativi all’azienda ceduta, in Banca borsa tit. cred., 2008, 742 – following the same Author’s previous statement in U. Minneci, Trasferimento di azienda e regime dei debiti, Torino, Giappichelli, 2007, 42 – where he spoke of corporate «pure (or isolated) debts», intending with this concept to indicate those which are unilateral ab origine or those deriving from bilateral transactions which have in the meantime been fully executed by one of the two contracting parties, while debt situations linked in a synallagmatic way with a corresponding obligation towards the transferor are tied to the fate of the contractual relationship as outlined by Article 2558 of Italian Civil Code.
For Italian Supreme Court, see, among many, Cass., 21st October 2019, no. 26808, in Banche dati Dejure; Cass., 6th April 2018, no. 8539, in Giust. civ. mass., 2018; Cass., 30th March 2018, no. 8055, in Giust. civ. mass., 2018; Cass., 12th March 2013, no. 6107, in Banche dati Dejure; Cass., 19th February 2004, no. 11318, in Giur. it., 2005, 81, with a note by O. Cipolla, Cessione, affitto, restituzione d’azienda: brevi note sulla sorte di debiti e contratti; Cass., 20th July 1991, n. 8121, in Foro.it, 1992, I, 3364.
This approach was also followed by the Courts. See App. Napoli, 13th July 2007, in Rep. giur. it. , 2007, Azienda, n. 53; Trib. Milano, 3rd March 2008, in Giur. it., 2009, 393, with observations by S. Balzola. Previously see also Trib. Milano, 10th April 2004, in Giur. comm., 2006, II, 134, with note by C. Amatucci, Trasferimento del ramo d’azienda, sorte del debito risarcitorio (per illecito da revisione contabile) e tutela sostanziale dei creditori.
[66]
That Article 2558 of the Civil Code is intended to regulate transactions in progress or not yet executed by all the contracting parties is a common observation in legal doctrine. On this subject, see T. Ascarelli, Lezioni di diritto commerciale, Milano, Giuffré, 1954, 226; F. Corsi, Lezioni di diritto dell’impresa, Milano, Giuffré, 1992, 84 and 85; G. Manzini, La cessione d’azienda: iscrizione nel registro delle imprese e successione nei contratti, cessione dei crediti e responsabilità per i debiti relativi all’azienda ceduta, in Contr. e impr., 1998, 1270; M. Cian, Rapporto fideiussorio e trasferimento d’azienda, in Giur. comm., 2001, II, 549 and 550; D. Balducci, Cessione e conferimento d’azienda, Milano, Edizioni FAG, 2001, 102; O. Cipolla, Cessione, affitto, restituzione d’azienda: brevi note sulla sorte di debiti e contratti, in Giur. it., 2005, 83; G.F. Campobasso, op. et loc. supra cit., 155; P.G. Casali, Debiti e contratti nel trasferimento d’azienda, in Giur. comm., 2015, 841; F. Martorano, L’azienda, in Trattato di Diritto Commerciale, created by V. Buonocore, directed by R. Costi, Torino, Giappichelli, 2010, 148.
More recently, C. Caccavale, L’accollo ex lege dei debiti relativi all’azienda ceduta, in Liber Amicorum per Biagio Grasso, edited by P. Pollice, Napoli, Edizioni Scientifiche Italiane, 2015, 73, where further references in doctrine and jurisprudence are made to which reference is made at length, also argued that the provisions of Article 2560, paragraph 2, of the Italian Civil Code apply when the reciprocal performance has already been performed by one of the two parties, since otherwise the provisions of Article 2558 of the Italian Civil Code apply, relating to bilateral contracts which the parties must implement, in whole or in part; as well as, later, Idem, La responsabilità per i debiti dell’azienda ceduta, Napoli, Edizioni Scientifiche Italiane, 2016 , 45.
Specifically, in relation to long-term contracts, in the opinion of P.G. Casali, op. cit., 843, Article 2558 of the Italian Civil Code applies exclusively to future relationships, while Article 2560 of the Italian Civil Code concerns «individual debts ex uno latere». Previously, in legal doctrine, a similar statement was found in G.E. Colombo, L’azienda e il mercato, in Tr. Galgano, Padova, Cedam, 1979, 78 and 79, according to which the ratio for the succession and liberating effect of the transferor referred to in Article 2558 of the Italian Civil Code resided in the reciprocal nature of the performances still to be performed and, with particular reference to long-term contracts, these were those to be performed «in the future, not the individual residual credits or debts ex uno latere».
The Supreme Court’s case law is in accordance with this. See, in this regard, Cass., 29th January 1979, no. 632, in Riv. Dir. comm., 1982, II, 145, with note by F. Chiomenti, Se l’art. 2558 primo comma cod. civ. sia applicabile nella ipotesi di risoluzione del contratto di affitto di azienda; Cass., 8th June 1994, no. 5534, in Banche dati Dejure; Cass., 9th October 2017, no. 23581, in Banche dati Dejure; Cass., 3rd January 2020, no. 15, in Giust. civ. Mass., 2020; Cass., 10th February 2023, no. 4248, in Banche dati Dejure.
[67]
According to P. De Cesari, La Proposta di direttiva, cit., 592, these are in fact individual provisions within the various procedures, which are however different from the pre-pack outlined by the Proposal. According to L. Panzani, Osservazioni ragionate, cit., 8 – then taken up again in Idem, Le condizioni, cit., 5 – both the simplified composition with creditors and the negotiated settlements of the crisis allow «in nuce» the implementation of schemes similar to those of the pre-pack given the advantage of arriving at the transfer of the company in the shortest possible time in the majority of situations. CNDCEC and FNC, op. cit., 39, also shared the same opinion as Panzani.
[68]
On this topic, please refer to L. Mandrioli, La vicenda circolatoria dell’azienda nella composizione negoziata della crisi tra autonomia negoziale e intervento del giudice, in Giust. civ., 2025, 198 et seq.
[69]
Competition in negotiated settlements of the crisis is not, in fact, governed by precepts and is implemented in an unstructured manner, given that it is characterised by a lightweight architecture aimed at avoiding the use of pre-defined and inflexible forms. The legislator has, in truth, contented itself with dictating a vague statement when compared with the detailed rules typical of judicial liquidation, expressing in terms of principles and, therefore, referring to the competitive phenomenon as a whole, preferring such an approach to the identification of specific disciplines. In other words, in negotiated settlements of the crisis, the transfer of the business can be authorised following a “deformalised” investigation aimed at intercepting potential interested parties.
[70]
On this subject, A. Bassi, op. cit., 248, also believes that efforts should be directed towards avoiding the introduction of a further procedure.
[71]
Prior to the amendments introduced in June 2025 during the Polish Presidency, according to K. Silvestri, op. cit., 12, the pre-pack could instead have been accepted into the domestic legal system both in the form of a new procedure and as a subtype of liquidation-type procedure as judicial, controlled and compulsory liquidation as well as liquidation and simplified composition with creditors.
[73]
As also observed by C. Paulus, R. Van Galen, L’attuazione della direttiva insolvency nell’esperienza di paesi bassi e Germania, in Dirittodellacrisi.it, 2022, 2 and 3, the Proposal for a Directive emphasizes the fundamental role of this subject in the preparation of the insolvency procedure.
[74]
On the point see CNDCEC and FNC, op. cit., 37, where they express themselves in terms of «“selective harmonisation”».
[75]
Thus F. De Santis, La chiusura della liquidazione giudiziale ed i giudizi pendenti, in Fall., 2019, 1236.
[76]
In particular, the said Report, drawn up in the context of the initial version of the Proposal for a Directive, states that the latter does not interfere with the principle according to which, in the event of insolvency proceedings which have, by the will of the debtor, a liquidation purpose, the retention by the transferee of the rights and obligations which belong to the transferor by virtue of a contract or an employment relationship existing at the date of the circulation of the production complex does not apply, unless otherwise agreed by the Member States.
[77]
It is however necessary to specify that, in the matter of maintaining workers’ rights in the context of the transfer of production complexes, the aforementioned Directive together with the case law of the Court of Justice of the European Union (see ECJ, 11th March 1997, Case 13/95, Suzen v. Zehnacker), on the one hand, but above all the fifth paragraph of Article 2112 of the Italian Civil Code, as resulting from the amendments made by Article 1 of Legislative Decree 2nd February 2001, no. 18 (which implemented Council Directive 98/50/EC of 29th June 1998, published in Arg. dir. lav., 1998, 975 et seq., which, in turn, amended Directive 77/187/EEC) and by Article 32 of Legislative Decree no. 276 of September 10th, 2003, on the other hand, have actually introduced a concept of a business that no longer corresponds to the set of assets potentially suitable for the exercise of economic activity, but tends to overlap with that which, in our legal system, is defined, under Article 2082 of the Italian Civil Code, as a business. Consequently, the object of the transfer would no longer be the business, but rather the organization in an entrepreneurial form.
On this point, the teachings of the doctrine must also be appreciated. In this regard, G. Santoro-Passarelli, Trasferimento d’azienda e rapporto di lavoro, Torino, Giappichelli, 2004, 19 et seq., held that the transfer issue concerns the business as an entity composed of organization and activity; a notion, however, which is not specific only to labor law, but is also common to part of the scientific literature of an accounting nature. According to M. Casanova, Impresa e azienda, in Trattato Vassalli, vol. X, I, 1°, 1974, 70, in the text and in nt. 3, where further references are made, the business, even if the owner changes, continues, with the new entrepreneur, substantially unchanged, making use of the same real and personal organization of the past, that is, of the same company, so much so that whoever acquires it to carry out entrepreneurial activity through it does not operate a new business, but continues the operation of a pre-existing business that maintains its identity intact even if the owner has changed. Also G. Oppo, Realtà giuridica globale dell’impresa nell’ordinamento italiano, in Diritto dell’impresa, Scritti giuridici, I, Padova, Cedam, 1992, 66 and 67, has clarified, with reference to voluntary transfers, that what is normally labeled by the Italian Civil Code as a transfer – of ownership or enjoyment – of the business is, in reality, a matter relating to substitution within the business. Also seems in favor of allowing succession in this case, given that, despite the different owner that comes into being following the transfer, it remains the same, finding this permanence justification in the theoretical framework of its discipline V. Panuccio, Teoria legale dell’impresa, Milan, Giuffré, 1974, 180 et seq.
[78]
For a cognitive framework on the scope of action of Article 5 of Directive 2001/23/EC, especially in relation to Article 47 of Law no. 428/1990, see G. Montella, Pre-pack, diritto europeo e il Sisifo italiano, in Procedure concorsuali e crisi d’impresa, 2025, 873 et seq.
[79]
See Court of Justice of the European Union, 28th April 2022, Case C-237/20, cit.
Again, on the issue whether Article 5, paragraph 1, of Directive 2001/23/EC should be interpreted as applying to bankruptcy proceedings, see Court of Justice of the European Union, 3rd April 2025, Case C-431/23, Wibra België SA, in Procedure concorsuali e crisi d’impresa, 2025, 864, which added in particular that the aforementioned bankruptcy proceedings may follow a judicial reorganization proceeding during which a partial transfer agreement for the business concerned was drawn up, but which was not approved by the competent court before being executed once bankruptcy was declared, provided that the bankruptcy or similar insolvency proceedings are actually opened with a view to the liquidation of the transferor’s assets, that they are carried out under the supervision of a competent public authority, and that recourse to them is not classified as abusive. Otherwise stated, the ruling in question establishes the principle according to which the derogation from Articles 3 and 4 of Directive 2001/23/EC provided for by subsequent Article 5 of Directive 2001/23/EC also applies in the case of a transfer, pending judicial liquidation, following a non-approved reorganization procedure, even if the transfer agreement was entered into within the latter and even if it was executed pending the former.
Quite particular is the issue decided by Court of Justice of the European Union, 22nd June 2017, Case C-126/16, Federatie Nederlandse Vakvereniging/Smallsteps BV, in https://eur-lex.europa.eu/legal-content/IT/TXT/PDF/?uri=CELEX:62016CJ0126, which came to the conclusion that Article 5, paragraph 1, of Directive 2001/23/EC should be interpreted that the protection guaranteed to workers by Articles 3 and 4 remains in place when a company is transferred after the declaration of bankruptcy following a pre-pack made before the opening of the latter, but the Court decided on a case unable to satisfy all requirements established by the aforementioned Article 5, paragraph 1.
[80]
This was already stated, although pending the previous version of Article 28 of the Proposal for a Directive, also by M. Ferro, Le vendite, cit., 1188 and in nt. 46. The Author, in another contribution – Il completamento, cit., 12 and in nt. 21 – has underlined how the pre-pack is compatible with the Labour provisions related to competition in EU jurisprudence, specifically in relation to the Heiploeg ruling; a ruling on the relevance of which also expressed his opinion L. Panzani, Osservazioni ragionate, cit., 13; Idem, Le condizioni, cit., 10 and 11. In the same sense see also P. De Cesari, La Proposta di direttiva, cit., 590.
[81]
As is known, if the four-month period from the date of opening of the judicial liquidation has elapsed without this happening, the rule in question provides that such relationships cease with effect from the date of opening of the procedure, except as provided for in paragraph 4 of Article 189 Italian Business Crisis and Insolvency Code, pursuant to which the bankruptcy trustee can ask the delegated judge for an extension of the aforementioned period, for a time not exceeding eight months, if there are serious elements for the authorization to operate the business or for the transfer of the business or a branch thereof.