1) Italian Supreme Court: on the subjective worthiness of the debtor in preventive composition proceedings with business continuity

By order No. 22246/2026, published on 29 June 2026, the Italian Supreme Court declared inadmissible the appeal filed by the Italian Revenue Agency against the approval of a preventive composition proceeding with business continuity.

The Supreme Court reiterated that Article 112(1) of the Crisis and Insolvency Code (“CCII”) does not require the subjective worthiness of the debtor proposing the proceeding for the approval of preventive composition with business continuity. What is relevant is solely whether the plan has reasonable prospects of preventing or overcoming insolvency and whether it is not manifestly unsuitable to achieve the objectives pursued, including the satisfaction of creditors.

With regard to fraudulent acts pursuant to Article 106 of the CCII, the Court clarified that only conduct aimed at defrauding creditors’ claims or the disclosure of non-existent liabilities may be relevant, and not merely the reporting of existing but unpaid debts, such as tax liabilities.

Therefore, objectionable conduct by the debtor does not in itself justify rejection of the application for preventive composition, provided that such conduct has not prevented creditors from making an informed assessment of the suitability and convenience of the plan.

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2) Italian Supreme Court on negotiated crisis resolution: requirements, insolvency status and effects of protective measures in the event of judicial liquidation

By order No. 20846/2026, published on 19 June 2026, the Supreme Court dismissed the appeal filed against the decision of the Venice Court of Appeal, which had confirmed the commencement of judicial liquidation proceedings against a company and had also declared ineffective the order revoking the protective measures granted within the framework of negotiated crisis resolution proceedings (“CNC”).

The Supreme Court considered inadmissible the grounds of appeal concerning the existence of the conditions for access to CNC, noting that the Court of Appeal, while not excluding such possibility in principle during pending proceedings for the opening of judicial liquidation, had established in practice the absence of restructuring prospects due to the company’s clear state of insolvency.

The Supreme Court also recalled the principle according to which the court dealing with the application for opening insolvency proceedings must assess, incidenter tantum, the inadmissibility of the CNC application.

With regard to protective measures, the Court clarified that, once judicial liquidation proceedings have been opened, any basis for maintaining protective measures ancillary to CNC ceases to exist, with the consequence that any subsequent decision on the matter must be considered legally ineffective (inutiliter data).

To access the decision, click here.