Preferential Bankruptcy

Preferential bankruptcy concerns payments made and preferential titles simulated in order to favour one creditor to the detriment of others. It is governed by Article 322(3) of the Crisis Code and punished with imprisonment from one to five years: a significantly lower penalty than the patrimonial and documentary offences, given the different legal interest protected, namely the order in which creditors are satisfied.

The company's assets are not necessarily reduced: the payment extinguishes a real debt. What matters is the alteration of the par condicio creditorum, that is, the choice to satisfy one creditor in breach of the order that would have applied in the insolvency procedure.

When a payment becomes criminally relevant

A payment made during the crisis does not automatically constitute the offence. The assessment requires verification of further elements:

• the existence of a real debt and its underlying cause
• the creditor's position in the order of priority
• awareness of the state of crisis or insolvency at the time of payment
• the purpose actually pursued through the transaction
• the impact of the payment on the satisfaction of other creditors
• whether the payment served business continuity

Preferred creditors

Payment of a creditor secured by priority or a guarantee may not be harmful where the creditor would have been fully satisfied in the insolvency procedure as well. The assessment therefore concerns the ranking of the claim and the sufficiency of the assets, not merely the fact that the payment preceded the opening of the procedure.

Simulation of preferential titles

The provision also punishes the simulation of preferential titles, that is, the apparent creation of guarantees or grounds of preference intended to place a creditor in a better position than others. Guarantees granted close to the crisis, backdating and requalification of pre-existing relationships are particularly relevant.

Specific intent

The offence requires specific intent to favour one creditor to the detriment of others. Awareness of the state of crisis is not enough, nor is the choice to prioritise a payment for operational reasons. The intention to alter the par condicio must be established from the structure of the transaction and the context, and cannot be presumed from temporal proximity to the opening of the procedure.

Business continuity

Where the payment serves the continuation of the business - essential supplies, utilities, wages, indispensable services - the purpose pursued may be incompatible with the specific intent required by the provision. The assessment requires documentation of the operational necessity and of the restructuring prospects existing when the decision was taken.

Persons liable and the position of the favoured creditor

In companies the offence is extended by Article 329(1) to directors, general managers, statutory auditors and liquidators; the position of the de facto director may also be relevant. The creditor who receives the payment is not liable merely for accepting it: liability as an accomplice requires a knowing contribution to the preferential conduct.

Particularly sensitive transactions

• payment of directors' remuneration during the crisis
• repayment of shareholder loans
• payment of debts secured by personal guarantees of the directors
• payments to group companies or related parties
• creation of guarantees close to the opening of the procedure
• set-offs and assignments of receivables that alter the order of satisfaction

Exemptions and crisis regulation tools

Article 324 excludes the application of the rules on preferential bankruptcy, among other things, to payments and transactions carried out in execution of an attested plan, a homologated restructuring agreement, a composition with creditors or the other tools indicated by the provision, within the limits and conditions set out therein. Within negotiated composition, Article 24(5) provides specific exclusions for acts authorised or performed consistently with the restructuring path.

The application of the exemption depends on compliance with the formal and substantive requirements of the tool used: merely filing an application or starting negotiations does not produce a general exempting effect.

Exemption is not the same as absence of intent

The two assessments remain distinct. A payment may be exempt because made within a crisis regulation tool, or it may be criminally irrelevant because the specific intent to favour a creditor is absent. The defence must address both levels of analysis without conflating them.

Investigations and precautionary measures

Charges are typically based on banking documentation, statements, accounting records and reconstructions by the insolvency trustee. The defence must check the selection of the payments charged, their underlying cause, the position of the creditors involved and the consistency of the reconstruction with the company's actual financial dynamics. Personal and asset-related precautionary issues must also be assessed under the applicable requirements.

Defence checklist for each payment

1. what was the cause of the debt and when it arose
2. whether the creditor was secured by priority or a guarantee
3. the company's financial situation on the date of payment
4. whether the payment was necessary for business continuity
5. whether a plan, agreement or procedure was in place
6. whether the payment produced an advantage for directors, shareholders or related parties
7. which documentation evidences the decision and its reasons

Frequently asked questions

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