Debt restructuring agreements in Italy. An empirical analysis of filing under article 182-bis of Italian Bankruptcy Law.

In 2013 the financial crises affecting manyEuropean Countries have led in Italy around 3.000 companies to file for preventive arrangements and debt restructuring agreements.Anempirical analysis on filing under 182-bis of Italian Bankruptcy Law which occurred in two relevant Courts of Northern Italy, Milan and Monza, between 2009 and 2013 shows that distressed companieswith a higher probability of getting their plansapproved and succeed in their workouts are, on average, structured oneswith large debt exposures and with a significantnumber of banks involved in the restructuring process.Especially for larger exposure, banks are willing to provide new finance and to forgo their credit in terms of write-offs and deferral of instalments.From the borrower’s standpoint, debt restructurings are accompanied, in the most successful cases, by changes of internal organization, reductionof costs and focus on core business, although, on average, borrowers exit restructurings with increased leverage.