Law Decree No. 59 of 3 May 2016 introduced a new and
long-awaited security instrument in the Italian legal framework: a
floating charge over movable assets. The new security called
"pegno non possessorio" is meant to strengthen
the ability of Italian companies to get access to financings,
introducing a more flexible security over all movable assets of a
Scope of the Security
The security can be granted by any company registered with the
Italian Companies' Register to secure present or future
obligations which are identified or can be identified up to a
maximum secured amount.
The security can be provided by the
principal debtor or any third party security provider.
and future movable assets related to the company's business can
be subject to security except for those which need to be registered
in a public register (e.g., vehicles). The secured assets
must be either specifically identified or may be identified by
reference to general assets' categories or aggregate value.
security provider remains in possession of the secured assets and
retains the ability to use, sell, replace or transform such assets.
The security will automatically extend to transformed or replacing
assets or to the proceeds deriving from disposal of the secured
The security is not enforceable against lenders financing
the subsequent acquisition of the secured assets from the security
provider, to the extent such lenders benefit from a specific
security over such assets (i.e., retention of title or
Perfection of the Security
In order to be enforceable, the security needs to be implemented
through a written agreement and perfected through a filing with an
electronic register managed by the Italian Tax Authority
(Agenzia delle Entrate).
Such register will have to be set
up pursuant to a decree to be enacted by the Ministry of Economy
and Finance within 30 days from the conversion into law of the Law
Upon the occurrence of an enforcement event, secured creditors
will have the ability to enforce the security in a variety of
sale of the secured assets through a
competitive bid process, also using professional advisors;
collection of the amounts due under
the receivables subject to the security;
lease of the secured assets and
discharge of the secured obligations through the corresponding
rental payments; and/or
appropriation of the secured
Improvement of existing security
tools with the introduction of a new kind of floating charge
Simplified procedure to identify the
assets subject to security.
Improved flexibility to automatically
extend the security over future assets.
More efficient enforcement
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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A trustee in bankruptcy's rights to obtain a possession order and order for sale against a bankrupt's property will not be suspended indefinitely even where there are exceptional circumstances.
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