The Insolvency Code contains a “debtor-in-possession” financing regulation that reforms the legal framework outlined in the Bankruptcy Law in force until August 2020.

Key Points:

..The newly enacted Insolvency Code grants lenders special protection to ensure full recovery of DIP Financing receivables.

..Several forms of DIP Financing, including guarantees, subscription of notes, and continuation of short-term facilities are available.

..New requirements for the provision and utilization of DIP Financing before the homologation of a concordato preventivo and a debt restructuring agreement have been introduced.

..Special protection is granted to DIP Financing receivables provided by shareholders of a debtor.

..New rules on the ineffectiveness of the special protection granted to DIP Financing receivables have been introduced.