The Tribunal of Naples, with a decision of 5 July 2013 in an interim proceeding, ruled that the Commissioner and the Judicial Liquidator can sue former directors for damages only if the claim (i) was included in the concordato proposal, or (ii) has grounds in tort, for facts entailing bankruptcy crimes.

The Case

The Judicial Liquidators and the Judicial Commissioner of a company whose concordato preventivo providing for the assignment of its own assets to creditors (“cessione dei beni”) had been confirmed by the Tribunal, sought interim relief against former directors and statutory auditors.

The Judge, considering that the claims were based on provisions of the Italian Civil Code (“ICC”) providing for the right to claim damages against directors and statutory auditors pertaining to the company (Art. 2476 ICC, “Company Action”), to creditors (Art. 2394 ICC, “Creditors Action”) and third parties in general (Art. 2043 ICC, “Tort Action”), granted the relief only with respect to the Tort Action, as a consequence of bankruptcy crimes which were alleged by the company, and not of the Company Action and of the Creditors Action.

The Issues

The issues faced by the Tribunal are unsetteled among commentators and have been only occasionally decided by case law:

  1. 1) the first relates to the assignment to creditors, together with other assets, also of claims for damages against directors directors and statutory auditors;
  2. 2) the second relates to the right of the Judicial Liquidator to exercise the Creditor Action when the company resorted to concordato preventivo;
  3. 3) the third relates specifically to the right of the Judicial Commissioner to start proceedings on behalf of the company or of creditors.

The Decision

  1. The Tribunal, upholding objections raised by the company, ruled that the Judicial Liquidator and the Judicial Commissioner lacked in the specific case the power to exercise the Company Action against directors and statutory auditors, because the action was not assigned to creditors pursuant to the concordato porposal.

The Tribunal faced then also the issue whether it is necessary, for the Judicial Liquidators to exercise the Company Action, that the company itself resolve to bring such an action against directors and statutory auditors. In concordato preventivo the debtor continues in possession of its own assets and can continue acting in the ordinary course of business: therefore, the Company Action needs be resolved by the shareholders of the company (as it is provided by the ICC) as a condition for the action to be started.

The Tribunal, however, seemed not to consider this as the key issue, because the Tribunal noted that “it is uncertain whether the prior resolution of the shareholders is necessary when the company is not in good standing”.

  1. With respect to the issue regarding the right of the Judicial Liquidator to exercise the Creditor Action, the Tribunal of Naples ruled that such action can be exercised exclusively by the creditors, because there is not an express or implied provision of law which could allow the Judicial Liquidator to act on behalf of creditors in this specific action, when the company is in concordato preventivo.
  2. Finally, as to the issue regarding to the right of the Judicial Commissioner to start proceedings on behalf of the company, the Tribunal ruled that the Commissioner, due to his limited role within the procedure, does not have a general represenative power allowing him to start judicial proceedings.

The Tribunal, however, noted that according to Art. 240 IBL the Commissioner can represent the company in criminal proceedings started against directors and statutory auditors for bankruptcy crimes, in order to claim damages resulting from such crimes: therefore, the Commissioner can be allowed to bring the Tort Claim also in civil proceedings, within the same limits, i.e. for facts entailing bankruptcy crimes.

Commentary

The rationale offered by the Tribunal of Naples raises several points of interest.

The first relates to the issue which was actually considered as the key in the specific case, i.e. the circumstance whether the action was or was not assigned to creditors pursuant to the concordato porposal. In this perspective it must be pointed out that, according to an opinion which is widely shared, the assignment of assets to creditors does not need to include all the assets and can be limited with respet to some. Therefore, it is correct to argue that, lacking an express provision in the concordato porposal and in the underlying plan providing that the Company Action should be exercised, an assumption can be made that such action was not included in the assets assigned to the creditors.

The second relates to the further element which could exclude that the Company Action be exercised by the Judicial Liquidator in concordato preventivo, i.e. the need that the company itself resolve to bring such an action against directors and statutory auditors. The Tribunal – with an uncertain wording, though – seemed not to consider this indeed as a turning point, based on different arguments. However, the opposite view is quite common among commentators and seems to be upheld also by some case law.

The third relates to the Judicial Commissioner, whose power to act for the company is found in the rule of law allowing him to claim damages against directors and statutory auditors in criminal proceedings for bankruptcy crimes: this is in essence a Tort Claim and, therefore, the Tribunal of Naples ruled, it can be exercised also in civil proceedings. Should this precedent be followed by other Courts, it could provide for some avenue to the Judicial Commissioner to bring action, limited to the consequences of bankruptcy crimes, although the power granted by Art. 240 IBL seems indeed an exception with respect to the role of the Commissioner within the concordato preventivo procedure.

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