Extraordinary corporate transactions at the time of the Coronavirus emergency

Prepared by Andrea Lensi and Flavia Caltagirone

Effects of legal measures adopted to manage the current emergency linked to the spread of the Coronavirus also affect extraordinary corporate transactions.

Indeed, rules under Section 83 (“new emergency measures to counter the epidemiological emergency from COVID-19 and contain its effects in matters of civil, criminal, tax and military justice”) of Italian Law Decree no. 18 dated 17 March 2020 (“Decreto Cura Italia”) seem extendible to legal terms provided with reference to extraordinary corporate transactions.

At a first reading, it appears clear that the aforementioned provision literally regards judicial deadlines: according to Section 83, paragraph 2 “from 9 March 2020 to 15 April 2020, the expiry of time limits for the completion of any act in civil and criminal proceedings shall be suspended”.

Concretely, this means that if a judicial term begins during the suspension period, it will have to be calculated from 15 April ahead.

However, main notarial doctrine has promptly spoken stating that provisions at hand are also applicable, for example, for the purposes of calculating terms for the opposition by the company’s creditors in merger and demerger operations, with a consequent extension of terms for the execution of relevant deeds before Notaries.

It seems therefore that the debate on the judicial or extra-judicial nature of the terms provided for by in the corporate sphere is back in fashion, as a result of which the applicability of the business suspension in summer days (so called “sospensione feriale”) is still under discussion in doctrine and jurisprudence.

In any case, the Milan Companies’ Register already clarified that the suspension under Section 83 of Decreto Cura Italia is to be understood as referring not only to already mentioned cases, but also to terms provided for the purposes of communicating the effects of the heterogeneous transformation, applications for the cancellation of partnerships following the communication of the distribution plan, applications for the cancellation of capital companies following the registration of the final liquidation balance sheet.

Nonetheless, it should be noted that the doctrinal opinion and the one expressed by the Milan Companies’ Register shall not be considered univocal or consolidated. Therefore, it shall be verified with each Chamber of Commerce, territorially competent, which position intends to adopt (to the extent this already happened – as far as we know, few Chambers already expressed on this point).

Regardless of the above, it is also true that the position of Milan offices often (if not always) sets out the trend: it seems reasonable, therefore, to imagine that other local offices of the Companies’ Register will follow the path.

By the way, it seems reasonable to us to share the opinion expressed by the notarial doctrine; in the management of some extraordinary transaction in progress we are also verifying the concrete application of such orientation from the Notaries.

Given the above, we deem cautious to apply the “extraordinary” suspension for the year 2020, provided for by Decreto Cura Italia, to law terms applicable to corporate transactions: in mergers and demergers, for example, creditors would certainly enjoy an extension of the time limits during which they could exercise their rights.

There is, however, a downside (a significant one!): it shall be duly considered the postponement of the timing for the execution of important transactions, which can heavily affect especially the cross-border ones and those which were started some time ago in order to meet deadlines set out during 2020.

Such delay could also increase in the not unlikely event of a further extension of the extraordinary suspension, imposed by Decreto Cura Italia, beyond the date of 15 April.

It is then crucial, in all possible cases, to adopt most appropriate instruments provided for by applicable laws in order to mitigate effects resulting from the enactment of the regulations under discussion.

Let’s Talk

For a deeper discussion please contact:

Andrea Lensi

PwC TLS Avvocati e Commercialisti


Flavia Caltagirone

PwC TLS Avvocati e Commercialisti