Turnaround is today one of the most appreciated topics by the Italian interim management community, due to  the positive impact of the new italian bankruptcy law, seen from many different perspectives.

A major factor is the conceptual shift in the new law: the change from insolvency/bankruptcy to crisis in fact implies expanding the application of new instruments also to enterprises facing crisis, in order to prevent the worsening of their economic condition.

Secondly, the “menu” of recovery instruments now available: the Recovery Plan and Re-Balance of financial situation, the Settlement with Creditors before bankruptcy (the Concordato Preventivo) which is expected to be the most commonly used instrument to recovery from a crisis.

The very innovative fact, vis-à-vis the old law, is that all the payments, actions and guarantees granted by virtue of a Recovery Plan drafted by an auditors’ association or an auditing company cannot be revoked, should the plan not be successful and the company declared bankrupt afterwards. The Plan is definitely a privatistic fact with the exclusion of any external contro (jedge, creditors).

In the Settlement with Creditors, the contractual nature has been enhanced, so diminishing the control exerted by the procedural bodies. The restructuring of debts and the payment of credits can be reached through whatever judirical means agreed with different categories of debtors (another great novelty of the law). The new law guarantees to the turnaround specialists, indipendent managers or specialised firms, the possibility of intervention immediatley after the first financial difficulties arise, without any financial risk in case of a later bankruptcy.

All the players in turnaround situations, PE/Restructuring Funds, banks, lawyers firms, accounting firms are constantly stressed the importance of the human resources factor, and among them the availability of very senior and experienced interim managers.

The potential for Italy is really interesting: a new huge market is opening (about 400 potential targets among the 30-60 million euros enterprises), but with a substantial skill shortage of experience turnaround managers, compared to the great number of bankruptcy procedures specialists. More and more interim managers will be needed: the law has created the pre-conditions, but without institutional activities with all the relevant stakeholders (banks, PE funds, managerial and entrepreneurial associations, central and local administrations) the expected potential will never become reality. The Italian Chapter of the UK IIM – Institute of Interim Management is working in close cooperation with all the interested stakeholders in order to “teach” them how to get the best from an interim assignment.

Maurizio Quarta

National Coordinator IIM Italian Chapter

[email protected]