Order No. 17248 of 2024: The Precedence of Professional Services in Bankruptcy

The recent order No. 17248 of June 21, 2024, issued by the Court of Cassation, provides important clarifications regarding the precedence of professional credits in the context of bankruptcy procedures. This provision fits into a complex but fundamental regulatory framework for understanding how professional services, provided in the pre-judicial phase, can influence the management of bankruptcy liabilities.

The Context of the Ruling

The case in question involves a professional who provided pre-judicial assistance to a debtor who was later declared bankrupt. The central issue concerns the possibility of considering the credit for such services as precedence, based on Article 111 of the bankruptcy law. The order clarifies that in order for the credit to enjoy such precedence, it is necessary that the services are consistent with the interest of the creditors' pool and functional to the proper management of the business crisis.

  • The services must be teleologically consistent with the competitive regime.
  • They must aim at preserving the integrity of the value of the business assets.
  • The functionality assessment must be made ex ante, that is, before knowing the results obtained.

The Summary of the Ruling

Credit for professional services - Pre-judicial assistance before the declaration of bankruptcy - Precedence ex art. 111 bankruptcy law - Conditions - Foundation. In bankruptcy matters, the credit of the professional who has assisted the debtor in pre-judicial matters enjoys the so-called functional precedence ex art. 111, paragraph 2, bankruptcy law, provided that the related services are teleologically consistent with the interest of the creditors' pool in the prompt establishment of the competitive regime appropriate to the actual consistency of the business and the effective management possibilities of the insolvency, and, therefore, can be assessed, according to an ex ante judgment that disregards the result actually achieved, as functional either to the submission of the relevant application and the preparation of the necessary documents for that purpose or to the preservation of the integrity of the value of the business assets or the relevant company.

This summary highlights the need for a proactive approach by professionals assisting distressed debtors. It is essential that their services are aimed at safeguarding the interests of creditors and managing the crisis, thus contributing to an effective competitive process.

Conclusions

Order No. 17248 of 2024 represents an important step forward in defining the criteria for the precedence of professional credits. It emphasizes how the quality and direction of the services provided are fundamental for the recognition of such credits in bankruptcy proceedings. For professionals in the field, this ruling is an invitation to reflect on the importance of targeted and strategic assistance, capable of responding to the needs of the creditors' pool and ensuring fair and transparent treatment within competitive procedures.

Bianucci Law Firm