That uncertain crisis: from the utopia of the capital increase for medium-sized companies in the relaunch decree to the compulsion to use bankruptcy procedures. (by Lisa Taddei)

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The law decree n. 34/2020 (published in the Official Gazette no.128 of 19 May 2020) known as del Rilancio proposes, inter alia, some interventions concerning the following medium-sized enterprises: SpA, srl, cooperatives, European companies, European cooperative companies with registered office in Italy and insurance companies.

The medium-sized archetype configured by the relaunch decree diverges from the definition of small and medium-sized enterprises established in Recommendation no. 2003/361 / CE and implemented by Italy with the Ministerial Decree of 18 April 2005 which in art. 2 establishes two requisites: the first of an employment nature "less than 250 employed, the second, on the other hand, sets the " annual turnover not to exceed 50 million euros or a balance sheet not to exceed 43 million euros ".

Article. 26 of Legislative Decree 34/2020 called "capital strengthening of medium-sized companies" draws a series of measures which, although rigid, should, according to the legislator, guide the company in the post-Covid-19 restart according to two orders: directives a tax credit for the shareholders – investors and the creation of an ad hoc fund called the "SME wealth fund".

Circumscribing the analysis to the extent of the capital strengthening by investors through the capital increase, three requirements are required: a certain amount of revenues achieved in the year 2019, a reduction in revenues in the second two months of 2020 and the resolution of the capital increase provided that it is paid in full.

a) With regard to revenues , the decree identifies two types (a third is valid only for the SMI fund): it must amount to more than five million euros or, if it is a group of companies, "refer to the value of the aforementioned revenues on a consolidated basis, at the highest degree of consolidation, not taking into account the revenues achieved within the group " .

The first point to focus on is the word "revenues": it is not clear whether the legislator intends the positive income components of the income statement (the gain) pursuant to art. 2445 of the Italian Civil Code or if it refers to the meaning used in common language to indicate the total sum of invoices issued also including expenses on the company.

Establishing the correct definition of revenues is not a habit, a mere defining tinsel, but allows the potentially interested company to benefit from the benefit which data to analyze; already the legislator with the relaunch decree has raised interpretative doubts departing from the concept of medium enterprise with respect to the peaceful definition contained in Ministerial Decree of 18 April 2005.

Another noteworthy detail concerns the figure of revenues "more than five million euros" : an unsatisfactory indicator appears, since it lacks any logical-legal and / or logical / economic connection.

The legislator takes greater care in indicating the requirement for revenues dedicated to business groups: “if the company belongs to a group, reference is made to the value of the aforementioned revenues on a consolidated basis, to the highest degree of consolidation, not taking into account of the revenues achieved within the group ".

For the business group, it is sufficiently clear that reference is made to the consolidated balance sheet revenues; if anything, the five million euro revenue requirement valid for both the individual company and the group of companies which, as is known, includes the parent company, the subsidiaries and any associated companies, could raise concerns.

Analyzing the revenue requirements for the business group, the element that arouses the greatest interest concerns the failure to indicate the tax advantages for the groups which are exempt from the preparation of the consolidated financial statements as established before by art. 1 of the d. lgs. March 31, 2011, n. 56 concerning the so-called irrelevant companies and subsequently modified with the d. lgs. 139/2015.

b) The losses must correspond to at least one third of the revenues (33%) pertaining only to the months of March and April 2020 compared to the same months of the year 2019.

Not only must these losses be causally attributable to the epidemological emergency; the same requirement is required for enterprise groups where reference is made to the consolidated balance sheet revenues.

A last aspect, not secondary, concerns the difficulty for companies to demonstrate the causal link between the losses suffered in the months of March and April 2020 and the Covid-19 emergency compared to the same months of 2019; in fact it is quite possible that there are companies already prone to the crisis before March 2019 or from May 2019 etc.

c) The capital increase must be "made by 31 December 2020" and "not less than two hundred and fifty thousand euros" ; Article. 26, paragraph 1, lett. c) , admits only the paid capital increase, effectively excluding the further two hypotheses: the free or virtual capital increase pursuant to art. 2442 of the Italian Civil Code (allows the company to draw on the sums set aside as reserves) and the capital increase in a mixed form, that is, made up of paid securities and the free assignment of new shares.

Observing the "centrifugal forces" of the decree towards a departure from the Constitution, it can be noted that the violation of art. 2467 of the Italian Civil Code, which provides for the freedom of form of social financing to the capital increase, which could be submitted to the union for constitutional legitimacy with reference to the parameter standards of Articles 41 Const. (Freedom of economic initiative) and 3 Const. (Equality).

A further strengthening of the freedom of form can be obtained from art. 150 bankruptcy law which provides for the possibility of the delegated judge, upon proposal of the bankruptcy trustee, to order by decree the payments not yet due to both the current and previous shareholders, provided that the times within which to request them have not expired.

Still on the subject of art. 2467 of the Italian Civil Code, the issue of postponing the reimbursement of shareholder loans is underlined: paragraph 5 of art. 26, places a time limit on the distribution of reserves – only after the date of December 31, 2023 – and, still up to the same date, requires possession of the shareholding risk of standing out further against the constitutional economic freedoms: it is in fact possible that the before 2023, the company fully meets the payables to third parties and therefore overcomes the balance sheet-financial imbalance that caused the postponement.

d) The additional requirements of the relaunch decree are:

– not to fall into the category of companies in difficulty pursuant to EU Regulation no. 651/2014 concerning State aid (provision amended with the subsequent Commission Regulation 2017/1084, which the legislator does not mention), of EU Regulation no. 11388/2014 concerning aid to productive enterprises in the fish sector and of EU Regulation no. 702/2014 concerning aid in the agricultural, forestry and rural areas;

– not be among the companies that have received and not reimbursed aid deemed illegal or incompatible by the European Commission;

– a series of regularities of a contributory and fiscal nature , without however specifying the period of time of the regularity, if he were in said condition before the emergency situation, during and / or subsequently; as well as the fulfillment of obligations deriving from building , urban planning , labor law and environmental protection regulations ;

– finally, it is expected that the directors, shareholders and the "beneficial owner" (it is not clear whether the decree wishes to highlight the figure of the hidden shareholder, the de facto administrator, etc. with this sentence, etc., if he actually intended the assessment would take place with separate judgment and not within sufficient time to benefit from the tax incentives) have not been sentenced with a final judgment , in the last five years for tax offenses.

The requirements , grouped for the topographical convenience of the writer in letter d), outline the logical province of the legislator who acts as a pedagogue: the company must never have been wrong, must not have been in difficulty, the leaders must not have been sentenced for tax offenses, etc., under penalty of exclusion from a tax benefit which takes an architectural turn which is difficult to use.

Paradoxically, the company cannot enjoy tax advantages if the top management were convicted of tax offenses but they could well be admitted if they were found to be condemned for example for crimes committed against the public administration or for example for corporate crimes of the l. 231/2001 (administrative liability for crime); likewise, the company is equally admitted if it regularly pays the workers 'tax and social security contributions but not the workers' salaries.

According to the findings so far, the medium-sized company loan enjoys, according to the relaunch decree, only a mere accounting entry, corresponding to the offsetting tax credit, which discounts the risk of having to be repaid if the European Commission considers unlawful state aid pursuant to art. 107 and 108 TFEU (the latter expressly referred to by the relaunch decree art.26, paragraph 3; it is also noted that there were no signs of prohibitions to prevent the extension of the benefit also to small businesses.

Hence, the realistic acknowledgment: the incentive of the relaunch decree (also) for medium-sized enterprises appears insufficient since it does not affix any credit protection for shareholder loans in the event of subsequent bankruptcy.

That said, the measures of the relaunch decree, since they are difficult to apply, with adequate maneuvering expertise considered the solution that indicates the most suitable procedure for settling the business crisis.

The weak or unconvincing points of the relaunch decree risk being, on the other hand, the strength of investors who could mark significant steps back to the phenomenon of the fight against organized crime, where their criminal partnership is strengthened through money laundering. through the expansion of their "policies" in economic activities, conditioning their corporate choices, often not in line with the objectives that a company should have as a healthy mirage.

Another danger is represented by investors interested only in knowing the company's know-how and then relocating to a country where the taxation is significantly lower or they invest in an Italian company with the aim of making it cease trading after a few years to become so monopolistic on the market of that type of product, with all the geopolitical consequences of the case.

The share capital increase transactions in the context of the composition of the corporate crisis contained in the bankruptcy law and in light of the new reform of the "Rordorf-Bonafede" business crisis (notes).

If the measures envisaged by the Relaunch decree and by the other emergency decrees are difficult to apply for the "honest and unfortunate" entrepreneur and do not have an effective benefit, the road to resolving corporate crisis procedures remains to be followed.

The current bankruptcy law allows the capital increase, the bridging loan, through the debt restructuring agreement procedure and the arrangement with creditors pursuant to articles 182 quater and 182 quinquies l. fall ..

The prededuction, which consists in the absolute primacy of some creditors, with certain characteristics, of being satisfied, within the limits of the capacity of the mass to be fully satisfied.

The primacy of prededuction represents one of the most important incentives to be able to resort to debt restructuring agreements and composition with creditors; some of the other incentives to resort to these procedures are mentioned, including: the protective effects of the debtor during the negotiation phase, the making of preferential payments in favor of strategic suppliers, the criminal "exemption", the "exemption" "Revocation, etc.

In the event that it benefits from the incentives of the Relaunch decree or the company is in a situation of ordinary administration, the shareholders' loan is deferred pursuant to Articles 2467 and 2497 of the Italian Civil Code; while in the presence of a crisis settlement procedure, pursuant to art. 182 quater , paragraph 3, l. fall. the credits are predeductible to the extent of eighty percent on condition that: i) they are paid by the current shareholders; ii) in function or in execution of a composition with creditors or a restructuring agreement, the full prededuction is due for those subjects who become partners during the execution of the procedure.

The corporate crisis code also known as the Rordorf-Bonafede reform approved with the d. lgs. 14/2019 and which will come into force in September 2021 differs in many respects from the current bankruptcy law, specifically from the aforementioned articles 182 quater and 182 quinquies l. fall.

The new articles dealing with the same topic are articles 46, paragraph 4; 6, paragraph 1; 99, 101 and 102 of the corporate crisis code.

The current bankruptcy law draws a clear distinction for the regulation of capital increases, bridging loans (182 quater l. Bankruptcy) and interim loans – urgent and certified – (182 quinquies l. all are regulated in the same way in art. 99 CCI and require prior authorization.

A further comparison between the two regulations focuses on the authorization of the capital increase: the 1942 code merely hopes that they will be authorized during the admission of the composition with creditors or the approval of the agreement; instead, with the new crisis code it is necessary to have a prior authorization, otherwise there is the risk of not benefiting from the prededuction.

In fact, the legislation of the new code places further limits on loans to companies in crisis, if banks do not finance because of the stringent regulations to which they are subject, the dangers already mentioned in the comment to the relaunch decree run and it goes without saying that a prior authorization postulates having already a clear picture of the corporate recovery choices to be made, while in current practice the plan that will be taken is not so well defined.


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The article That uncertain crisis: from the utopia of the capital increase for medium-sized enterprises in the Relaunch decree to the constraint on the use of bankruptcy procedures. (by Lisa Taddei) comes from ScenariEconomici.it .


This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/quellincerta-crisi-dallutopia-dellaumento-di-capitale-per-le-medie-imprese-nel-decreto-rilancio-alla-costrizione-del-ricorso-alle-procedure-concorsuali-di-lisa-taddei/ on Tue, 16 Jun 2020 07:41:52 +0000.