Italian commerce – Travel Italy Hotel Tue, 20 Sep 2022 02:04:40 +0000 en-US hourly 1 Italian commerce – Travel Italy Hotel 32 32 The Impact of the Coronavirus on Italian Loans Fri, 25 Mar 2022 09:23:33 +0000 Initial reaction

Reactions have been mixed including praises for the sought-after relief and widespread anxiety about how complicated the program is as well as the subsequent obligations to report and disclose.In the meantime, the Italian Banking Association and SACE S.p.A. releasedguidelinesthat outline the procedure and the forms to be used for the SACE guarantee.The guarantee is only available to new GreenDayOnline loans made to borrowers which can not be used to fund corporate acquisitions or to refinance existing debt. However, as much as 25% of guaranteed loans may be used to pay off overdue payments of principal falls that were stopped from happening due to the COVID-19 epidemic.On the 19th May 2021, there was a moratorium on loans has the amount of EUR 146bn. More than EUR 168 billion is the sum of the applications from the SME Protection Fund. SME Protection Fund.EUR 23,6 billion is the total amount of loans secured by SACE that has been certainly appreciated by companies trying to raise money.

The legal framework that has been established so is still in flux, and it is unclear how the Italian government continues to createspecific lawsto revive the economy and reduce the effects of the epidemic, and the limitations on the movement of goods and people are eased as the vaccination program continues to progress.The effects of COVID-19 on loan transactions must be considered in the context of the general law of contracts and we’ll look at the principal implications below.

Absolute obligation to pay

Generally, the obligation of a borrower to pay interest as well as payback principal in a loan contract is not contingent on the financial status of the borrower and are carried out as an obligation of absolute nature that is often accompanied by collateral made available to the lender as a priority to non-secured creditors.

Force majeure in Italian law

However, in accordance with Italian legislation,the debtor is not accountable for contract breaches when the fulfillment of an obligation has been hindered through a supervening inability that isn’t imputed to the creditor which is broadly similar to the idea of force majeure in international commercial practice.

Italian The Italian courts have been hesitant to recognize this exemption for payments because an absence of cash cannot be considered an objectively impossible thing.In theory, a debtor is able to get funding from a third party partner or lender and the supervening inability that results is only for a short period (and not permanent, and with respect to the contractual obligations currently in force).This is a common belief challenged before Italian justices in the context of the issue of payment defaults for businesses impacted by cash shortages due to
COVID-19.The majority of judgments are shorter-track cases to obtain interim or urgent relief, and it’s too early to provide any consistent guidelines.Different judges have taken different positions in the past, with a few courts upholding the principle that pacta are in servant, whereas others have decided in favor of the right of a debtor to negotiate a re-negotiation of the terms of a contract in light of the deterioration of the business, specifically when it comes to leases of real estate used in trade and commerce.Certain industries are also benefited by specific legislation, like the moratorium interim and the reduction in lease fees for leisure and gyms.

Impact of the most recent legislation on this study

The actions are generally declared an emergency situation (in an order of the Government that is likely to lack the legislative authority necessary to regulate business loans to private sector firms) as well as “exceptional occurrence” and “serious disturbance’ to meet the requirements of EU regulations regarding State aid.

It is possible to argue this legislation’s actions support the idea that the borrower should be exempt from the obligation to perform its obligation to pay at the very least, proportional to the revenue loss due to COVID-19.Additionally, the borrower is exempt from the requirement to prove causality between the virus and the loss of revenue as a result of the virus.

Italian Courts generally consider any order that is binding from an authority that prevents the debtor from fulfilling his obligation as being sufficient force majeure. Thus, the various orders to containment issued by local and central authorities during this crisis may be enough justification for affected debtors to be free from any liability arising out of those loans (in other words, their obligation to pay can be suspended, with no obligation to pay interest for outstanding amounts).

Is it possible for the Lender accelerate?

The lenders would likely be prohibited from accelerating or ending loans on account of the higher credit risk or loss of revenue resulting from COVID-19.In the majority of situations, a borrower could be exempt from fulfilling its obligations to pay and operate because of the impossibility to fulfill contract obligations. The same reasoning would likely be applicable to any material adverse impact (MAE) that triggers as well as most financial ratios, and various other measures of the borrower’s overall creditworthiness.

The termination of a breach is unlikely

Apart from the discussion regarding force majeure, Italian Courts tend to be cautious when it comes to issues of contract termination for breach.There are some findings that show the express clause for termination (clausula risolutiva-espressa) that, in theory, allows a party to end an agreement upon the occurrence of an occasion) cannot be used to permit termination if the occurrence of the sanctioned incident is not attributable to the negligence (colpa) or deliberate negligence (dolo) by the other side.Additionally, an express termination clause isn’t enough to declare the end of a contract upon the occasion of the sanctioned breach and the reason for termination is that an event to prove significant in relation to the balance of interests (economia of the contract) of the contract.