A  focus  on  the  different  interpretations  concerning  the  treatment  of  claims  for  costs  allocation  in  legal proceedings where a creditor is successful against a debtor admitted to a concordato preventivo procedure

The issue

Pursuant to Art. 184 IBL, the concordato binds creditors (and therefore they concur with other creditors) whose claims arose before the request of admission to the procedure (pre-petition claims).  The  issue  is therefore to determine whether, when there is a pending or ongoing relationship at the date of the request of admission, claims arising therefrom should be considered subject to payment according to shares and timing provided by the concordato proposal: in such a case, it should also be determined whether they are secured (such as pursuant to Art. 2751-bis ICC for professional claims) or unsecured; if this is not the case, the plan must provide for payment in full (post-petition claims).

In particular, we consider here the case where a judicial proceeding is already pending at the date of request of admission, which comes to its conclusion with a decision ordering the debtor to refund the creditor for its legal costs and fees, issued when the concordato is running.

The different interpretations

The two different solutions proposed share a  common  ground:  the  status  of  pre-petition  or  post-petition claim depends on whether the “key facts” from which the claim arises occurred prior to the date when the request of admission was published in the Companies’ Registry.

Interpretations differ then when it comes to determining which exactly these “key facts” should be in the case of claims for recovery of legal costs.

Those who consider these claims as pre-petition claims say that the “key facts” are the same as those from which the claim arises, which is being enforced in a judicial proceeding and, therefore, occurred before the request of admission. Legal costs are considered as ancillary claims to the main claim on the merits and, therefore, if the main claim is a pre-petition claim, also the claim for recovery of legal costs should be treated as such, pursuant to the principle accessorium sequitur principale (see for this reasoning Tribunal of Reggio Emilia, 6 February 2013),  without  prejudice of course to the secured or unsecured ranking of the claim according to general rules set by law.

Those who consider these claims as post-petition claims (mainly commentators: COSENTINO, GIORGETTI, MANFREDI) say that the “key fact” is the decision which allocates legal costs to the defendant (the debtor admitted to concordato), in relation also to the actual activity performed – after the request of admission – by the legal advisors of the creditor.

Commentary

The issue is a split and undoubtedly uncertain and debatable, considering that both positions can rely on arguments which are equally reasonable and sound.

A preference might be expressed for the interpretation according to which these claims should be considered

pre-petition claims, considering that (i) the ancillary nature of the claim for recovery of legal costs to the claim on the merits seems more convincing, and that (ii) if ti is true that the claim actually arises when the decision allocating legal costs is issued, it is also true that the liability for legal costs arises (if not already from the breach or fault forcing the creditor to start legal proceedings, at least) from the filing of the lawsuit which then leads to the final decision allocating legal costs. In this latter perspective, circumstances seem to have a certain similarity to those according to which – it is a commonly shared rule – a guarantor’s claim to recover amount paid for the main debtor admitted to concordato is considered a pre-petition claim, because the “key fact” from which the obligation of the guarantor arises is the releasing of the guarantee, occurred before the request of admission, irrespective of the fact that the actual recovery claim arises only when the guarantor – after the request of admission – has paid the debt to the creditor.

Those who oppose this interpretation rely also on principles  according  to  which  –  pursuant  to  Art.  111, second para., IBL – claims arising “on the occasion of or functionally to” an insolvency procedure  are granted a  super-priority  status  in  bankruptcy  liquidation.  The  Court  of  Cassation  with  a  decision  of 24 January 2014, No. 1513 ruled that, according to such a test, super-priority can be granted to claims arising from activities (i) performed by the officers of the insolvency procedure, or (ii) performed by the debtor, but actually functional to the aims and needs of the insolvency procedure. This is a rule applicable  only  in bankruptcy liquidation and therefore assumes that the concordato preventivo was unsuccessful: however, it might be considered as stating a general principle, applicable also in the concordato preventivo procedure to the different issue of pre-petition status of claims, in specific cases where the restructuring plan specifically provides that certain legal proceedings should be pursued in the interest of the creditors generally.

It should be considered that, whatever the solution to the issue might be – one way or the other – it  can play

a decisive influence on the incentives of the parties to continue pending legal proceedings for the enforcement of (or challenge to) claims, in particular unsecured claims: creditors risk incur further costs potentially outweighing even the share of the claim which can be recovered from the concordato, whereas the debtor (and the estate of the creditors) risk to bear the burden of costs to be paid in full and which may turn out to be disproportionate to the actual relevance pf the main claims under dispute (considering their share payable within the concordato).