The Court of Prato (30 April 2017) confirms that the concordato filing stays (and does not instead terminate) pending enforcement actions by individual creditors and clarifies that the term for the creditor to restart the proceeding runs from the decision of the Court concluding the concordato
The case A creditor, having learned that the concordato preventivo procedure had been concluded, to which his debtor (on whose assets he had previously started an enforcement action) was subject, filed an application to restart the once pending action. The debtor, on the other hand, sought to have the action declared as terminated, arguing that the application to restart it was filed beyond the six-month term provided by law.
The issue Art. 168 IBL provides that individual enforcement actions and interim relief cannot be started or continued from the publication on the Companies’ Register of the concordato preventivo filing.
It is uncertain whether pending actions should be terminated or just stayed during the concordato procedure and, in the latter case, which is dies a quo for an application to restart the action.
The decision of the Court The Court of Prato follows the case law stating pending enforcement actions by individual creditors are stayed (and are not instead terminated).
As to the dies a quo for the application to restart the action, the Court recalls principles stated by the Court of Cassation in similar situations, making reference to the decision of the Bankruptcy Court whereby the reason for the stay is lifted (provided it was not appealed): therefore, the term runs from the Bankruptcy Court’s decision which (in the present case) declared the termination of the concordato procedure and, as a consequence, the application to restart the action was late because it was filed beyond the six-month term provided by law.
Another reason drives to the same conclusion – the Court continues – i.e. term start running when the party has legal knowledge of the event, which in the case at hand was the conclusion of the concordato recorded in the Companies’ Register.
Commentary Although the provision of Art. 168, first paragraph, IBL clearly states that individual actions cannot be started or continued under penalty of nullity, case-law has offered several possible interpretations, specifying the effects of the concordato filing:
(A) one part of the case-law argues that the stay of pending individual enforcement actions will continue until the concordato is concluded with the confirmation order by the Court (Cass. No. 25802/2015 ruled that “the concordato filing determines, in accordance with Art. 168, first paragraph, IBL, not the termination but the stay of the enforcement proceeding, because the assets having been seized, by operation of law are no longer subject – temporarily – to liquidation, as it was initially planned following their seizure“);
(B) another part of the case-law, on the other hand, argues that the rule of Art. 168, first paragraph, IBL does not imply a stay of the enforcement proceeding, but a special reason for termination, falling under a provision of the Civil Procedure Code, with the consequence that the proceeding cannot be restarted after the confirmation of the concordato (Court of Monza, 13 April 2015; Court of Aosta, 16 April 2013; Court of Milan, 17 December 2012; Court of Reggio Emilia, 18 April 2012; Court of Pesaro, 16 March 2012).
The interpretation confirmed by the Court of Prato is to be preferred: the concordato may not ever come to a positive conclusion with the conformation of the proposal and, in this perspective, the stay of the action allows, on the one hand, to protect the creditors’ interests and, on the other hand, to verify what is the outcome of the concordato procedure so that, in case of confirmation, the individual enforcement proceeding can be terminated while, in case the concordato is not successful, the individual creditor can restart his own action.
As to the dies a quo for the application by the individual creditor to restart the enforcement action, in the absence of a specific rule, the solution proposed by the Court of Prato is to be shared because it is based on a principle of certainty and it is consistent with the principles expressed by the Court of Cassation in other cases.