The Italian Insolvency Code identifies specific indicators — quantitative and qualitative — that signal a risk of insolvency. Recognising them early determines which instruments remain available.
The Code has replaced the old OCRI system but retained the underlying logic: specific indicators must be monitored, and directors are required to act when thresholds are exceeded.
The most relevant indicators include: persistent payment delays to suppliers, tax authorities or employees; a debt service coverage ratio (DSCR) below threshold; a net financial position incompatible with the asset base; negative operating margins over consecutive periods.
Beyond quantitative indicators, the Code also treats qualitative signals as relevant: loss of key clients or suppliers, difficulty renewing credit lines, or board-level governance failures.
Delaying assessment after distress signals have emerged does not stop the clock — it only reduces the instruments still accessible.
Directors who identify distress signals are required to act without delay — adopting appropriate corrective measures or accessing one of the restructuring instruments provided by the Code.
The timing of intervention determines which instruments remain accessible: negotiated settlement requires a crisis that is not yet irreversible; preventive concordat requires operational capacity sufficient to build a credible plan.
A timely technical assessment establishes whether the signals identified constitute manageable distress, which instrument is appropriate for the current phase, and how urgently action must be taken.
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