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Bargaining tools for the resolution of distressed firms: judicial composition with creditors


  • Alesssandro Danovi

    (University of Bergamo)

  • Silvia Giacomelli

    (Bank of Italy)

  • Patrizia Riva

    (University of Piemonte Orientale)

  • Giacomo Rodano

    (Bank of Italy)


The paper provides a large set of new evidence about the workings of judicial composition with creditors (concordato preventivo) procedures based on a new dataset, specifically compiled, which constitutes the richest source of information currently available on the functioning of these procedures. Judicial composition with creditors is mainly used for the piecemeal liquidation of firms (about 70 per cent of the cases). Less than a quarter of judicial compositions with creditors fulfill the provisions of the plans. The recovery rate for secured loans is almost 100 per cent for all types of compositions, while for unsecured loans, recovery rates vary considerably: from 18 per cent in the case of piecemeal liquidation to 37 per cent in the case of restructuring (23 per cent for judicial composition with creditors that provides for the sale of the entire firm or of a branch). Regression analysis shows that better performance of judicial compositions with creditors is associated with a less chronic crisis at the time the judicial composition with creditors is initiated, measured as the time that passes between the earliest persistent difficulties faced by the firm in fulfilling its obligations to bank creditors and the initiation of the procedure.

Suggested Citation

  • Alesssandro Danovi & Silvia Giacomelli & Patrizia Riva & Giacomo Rodano, 2018. "Bargaining tools for the resolution of distressed firms: judicial composition with creditors," Questioni di Economia e Finanza (Occasional Papers) 430, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:opques:qef_430_18

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    bankruptcy law; firm restructuring; judicial composition with creditors;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • K20 - Law and Economics - - Regulation and Business Law - - - General

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