Corporate groups under italian law: A Comparative Approach and the Brand-new 'Crisis Code'

• Author: Mia Callegari
• Position: Ph.D. in Business Law, University of Brescia, Brescia, Italy; Full Professor, Department of Law, University of Turin, Turin 10124, Italy. Contact: mia.callegari@unito.it
• Pages: 533-559

FRONTIERS OF LAW IN CHINA

VOL. 14 DECEMBER 2019 NO. 4

DOI 10.3868/s050-008-019-0025-2

ARTICLE

CORPORATE GROUPS UNDER ITALI AN LAW: A COMPARATIVE APPROACH AND

THE BRAND-NEW “CRISIS CODE”

Mia Callegari∗

Abstract This paper provides an overview of the evolution of the harmonization

process of European law in the field of group of companies, referring to the development

of a national “group of companies law” — from the company law reform to the crisis

and insolvency code — with the purpose of examining the main aspects of the regulation

in force, considering mainly the possible interaction with the rules on the crisis of the

groups of companies introduced by the Legislative Decree No. 14/2019, and with the

aim of analyzing its suitability for being devoted to the prospect of harmonization across

countries.

Keywords corporate groups of companies, group interest, liability of the parent company,

insolvency of a group of companies, harmonization of law

INTRODUCTION .................................................................................................................... 533

I. AN OVERVIEW OF THE LEGAL DISCIPLINE OF GROUPS, AT NATIONAL AND EU

LEVELS................................................................................................................... 537

II. THE “ITALIAN MODEL” BETWEEN A GENERAL LEGAL DISCIPLINE OF CORPORATE

GROUPS AND SPECIAL REGULATION FOR CRISES ................................................... 542

A. Configuration of the “Group” ...........................................................................542

B. Transparency and Disclosure Obligations within Corporate Groups............... 548

C. Group Interest and “Compensational Advantage Theory”............................... 551

D. Abuse of Unified Management.......................................................................... 553

CONCLUSION........................................................................................................................ 557

INTRODUCTION

The recent introduction in the Italian legal system of provisions regarding the

insolvency of corporate groups (contained in the “Codice della crisi d’impresa e

dell’insolvenza,” which is “Code of the Business Crisis and Insolvency” or “CCII/Crisis

* Mia Callegari, Ph.D. in Business Law, University of Brescia, Brescia, Italy; Full Professor, Department

of Law, University of Turin, Turin 10124, Italy. Contact: mia.callegari@unito.it

534 FRONTIERS OF LAW IN CHINA [Vol. 14: 533

Code” for short),1 which will fully come into force on August 15, 2020) suggests that a

second examination of the topic of corporate groups should be conducted, both at a

national and a European level. At a European level, as well known, the crises of corporate

groups are disciplined by the EU Regulation 848/2015, applicable in Italy since 2017,

which governs cross-border bankruptcy procedures. From this Regulation, we can deduce

a concept of corporate groups that is not identical to the one that can be extracted from

varied Italian legal dispositions. In fact, the Regulation defines a corporate group by

referring to the holding company as the “parent corporation” and to the subsidiary

companies, which are directly or indirectly controlled, as “daughter companies” (i.e.

subsidia ries). To put it simply , the European notion of a corporate group is based on a

hierarchical model that tracks the activity of direction and coordination by the “parent

company” with regard to the subsidiary corporations, apparently excluding all those forms of

aggregation based on a lesser degree of control or a merely “factual connection.”2

The criterion with which to pinpoint the holding company is the drafting of a

consolidated financial statement, compliant with EU principles.3 The new European legal

discipline was introduced with the objective of filling any loopholes inside Council

Regulation (EC) No. 1346/2000, which was in force for over a decade and did not provide a

specific discipline for cross-border bankruptcy of corporate groups; the new discipline has

the merit “of allowing member States to acquire the regulatory discipline, under the

procedural and formal point of view, even with some critical points, stemming especially

from the nebulous definition section and gaps in the discipline of corporate groups.”4

1 On the impact of the Crisis Code on the structure and legal discipline of groups, see Giuliana

Scognamiglio, I gruppi di imprese nel CCII: fra unità e pluralità (Corporate Groups in the CCII: Between

Unity and Plurality), 2 Le Società (Company Review), 413 (2019). The Italian legislator chose the term

“crisis” so as to include a wider notion than just that of insolvency, thus including, e.g. the notion of “lack of

liquidity,” able to cause the “crisis” of the company, even if not necessarily its bankruptcy (let us e.g. think

about a company with no liquidity, but with assets that, if liquidated with enough time at disposal, would

cover for corporate debts).

2 Gabriela Fierbinteanu, Groups of Companies in Insolvency Proceeding, 2 Lex ET Scientia International

Journal, 1(2014); Lorenzo Benedetti, I flussi informativi nella crisi di gruppo (Informations in Group Crisis),

1 Giurisprudenza Commerciale (Commercial Jurisprudence), 271 (2017); Daniele Vattermoli, Gruppi

multinazionali insolventi (Multinational Groups in Insolvency), 1 Rivista di Diritto Commerciale

(Commercial Law Review), 588 (2013).

3 The EU Regulation sets forth types of cooperation and communication between insolvency procedures

pending in different member states and contemplates the faculty to request the opening of a coordinated

insolvency procedure for a corporate group with the appointment of a coordinator and the layout of a plan, as

well as the possibility of requesting the suspension of asset liquidation in a procedure open to all companies

of the group. This discipline follows the UNCITRAL Model Law and is inspired by the separate entity

approach shared by European Court of Justice (ECJ) jurisprudence.

4 Giuseppina Graci, UE e disciplina dell’insolvenza (II parte) – Le procedure d’insolvenza delle società

facenti parte di un gruppo di società (EU and Insolvency Law (Part II) — The Insolvency Procedures of

Companies Belonging to a Group of Companies), 2 Giurisprudenza Italiana (Italian Jurisprudence Review),

480 (2018), in which it is observed that “the absence of a statutory discipline has meant that in many

occasions the European Court of Justice has had to perform the laborious task of reconstructing certain

cardinal principles which can be applied to corporate groups, because routine procedure has shown that the

majority of cases that it has tackled regarded insolvency procedures (especially reconstruction procedures of

one or more components of a stable group of corporations).”