Bergamo Court clarifies feasibility assessments in simplified composition

The Court of Bergamo has addressed the scope of feasibility assessments within simplified composition proceedings. Under Article 25sexiesC of the Italian Code of Crisis and Insolvency, the Court is required to evaluate whether a plan is capable of achieving its stated objectives.

In this specific ruling, the Court emphasized that the assessment in simplified composition is more intensive than in other forms of composition. This heightened scrutiny is intended to protect creditors who lack the ability to negotiate directly with the debtor. The Court must identify any inherent impossibilities in a plan, such as when a plan relies on the sale of a business branch that is currently subject to litigation regarding its ownership, creating significant legal uncertainty.