BANKING AND FINANCE – The Italian Supreme Court on the claw back of remittances on bank accounts and on the ineffectiveness of financial guarantees granted under Legislative Decree No. 170/2004

Newsletter n. 90 – November 2023

BANKING AND FINANCE

The Italian Supreme Court on the claw back of remittances on bank accounts and on the ineffectiveness of financial guarantees granted under Legislative Decree No. 170/2004

On 30 October 2023, the Italian Supreme Court issued its judgment in case No. 29998/2023 detailing certain principles applicable to the claw back of remittances on bank accounts and to the ineffectiveness of financial guarantees granted under Legislative Decree No. 170 of 21 May 2004 (the “Legislative Decree”) in case of bankruptcy. In particular, (a) on the one hand, the Italian Supreme Court confirmed that a bank remittance cannot be clawed back when it does not reduce the outstanding debt of the bankrupt account holder durably (i.e. it cannot be clawed back when it is followed by debiting operations of the same account holder – in the case at hand, made within 48 hours of the remittance – so that the reduction of the outstanding debt does not persist), and (b) on the other hand, it stated that, even considering the provisions of Article 9 of the Legislative Decree, the claw back action can apply to financial guarantees granted pursuant to the Legislative Decree if the related agreements have been entered into during the relevant claw back period pursuant to Article 67 of the Italian Bankruptcy Law.