More than a year ago, the Italian Minister of Justice appointed a panel of experts to lay out the principles that shall inspire the Parliament in drafting the new bill for the organic reform of the Italian bankruptcy law.
The framework that has been issued by the experts accordingly, proposes inter alia to remove from the bankruptcy law the word “bankruptcy” and its derivatives, and to replace it with corresponding, more appropriate and modern terms, such as “insolvency” or “liquidation”.
Although such proposal seems to be inspired by the fair purpose of releasing the insolvency from the bad reputation that has been traditionally linked thereto, no changes have been recommended with regard to bankruptcy crimes. To this end, it must be noticed that in Italy the punishment inflicted for bankruptcy related crimes is still extremely severe (in some cases it can lead to the imprisonment for up to ten years), such being the heritage of a set of values that has been fortunately left behind. On the contrary, the correspondent crimes committed outside of the bankruptcy scenario, which are theft, embezzlement and fraud, generally provide for a much shorter up to 3 year detainment.
Therefore, while plenty of attention has been put on words (bankruptcy, insolvency, liquidation, and so forth), the actual discredit linked to such event will still be there, lying in the unreasonably tough punishment inflicted for committing bankruptcy crimes. Such a threatening punishment, indeed, can lead entrepreneurs and directors to underrate (or even ignore) the distressed situation, and it can prevent them from undertaking the restructuring path in good time.
Since instead of making progress this would keep us further behind, we cannot help but trusting that that the Italian Parliament will not lose the chance of reforming the whole bankruptcy law to amend and modernise bankruptcy crimes.
Alberto Angeloni & Raffaele Buono
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