Characteristics and duration of bankruptcies and composition with creditors in Italy

Marina Calanca (), Luigi Cipollini (), Federico Fornasari (), Silvia Giacomelli (), Giuliana Palumbo () and Giacomo Rodano ()
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Marina Calanca: Ministero della Giustizia
Luigi Cipollini: Ministero della Giustizia
Federico Fornasari: Bank of Italy
Silvia Giacomelli: Bank of Italy
Giuliana Palumbo: Ministero della Giustizia
Giacomo Rodano: Bank of Italy

No 786, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: Using data from the Ministry of Justice, this paper presents new evidence on the functioning of the main insolvency procedures in the Italian legal system – bankruptcy and joint composition with creditors. We find that about 44 per cent of bankruptcy procedures are closed without any distribution of proceeds, with significant regional differences (35 per cent in the North and more than 50 per cent in the Centre and South of Italy). Procedures last on average about seven years – almost nine years if there is a distribution of proceeds, five years with no distribution. The duration is longer in the South, regardless of the outcome; the longest stage of the procedure is the liquidation of assets. Regarding compositions with creditors, only 20 per cent of composition plans are approved, and in about 20 per cent of these cases the procedure ends in bankruptcy. Almost two-thirds of the procedures are initiated for liquidation purposes. Following the 2012 reform, the number of approved plans increased but the rate of admission decreased (suggesting they may be used for dilatory purposes); after those of 2013 and 2015, the use of the procedure declined without the rate of admission picking up.

Keywords: bankruptcy law; civil justice efficiency; non-performing loans (search for similar items in EconPapers)
JEL-codes: G21 K10 K40 (search for similar items in EconPapers)
Date: 2023-07
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_786_23

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