Publié le: 10/09/2021

    Can the termination of the employment relationship between the shareholder and the company be envisaged in the company’s by-laws as a reason for the shareholder’s exclusion from the company?



    For the judges of Turin, the By-laws of a limited liability company may provide that the termination of the employment relationship between the shareholder and the company, its subsidiaries or associates, constitutes a just cause for exclusion from the company. Moreover, the corporate By-laws may provide that, in such a case, the liquidation of the shareholding shall take place based on criteria other than market value.


    By judgment dated June 30, 2021 (published in « il Quotidiano Giuridico » on August 18, 2021 with a note by Avv. Maria Paola Ferrari), the Specialized Section in Business Matters of the Court of Appeal of Turin confirmed a previous decision taken by the Court of Turin which had declared valid (and, therefore, not affected by nullity) the clause in the By-laws of a limited liability company according to which the minority shareholders would have had to transfer their participation to the other shareholders – at the value of the corresponding net equity (and not at market value) – in the event that their employment relationship with the Company, its subsidiaries or affiliates would have ceased for whatever reason.


    In the case at stake:


    – the company’s shareholding had been allocated to the minority shareholders under a company Incentive Plan that was designed to incentivise management personnel and foster loyalty among employees and directors by increasing their motivation;




    – the purchase had taken place at a value lower than the proportional value of the shareholders’ equity.


    At first instance, the Court held that the above clause in the By-laws constituted a cause for the shareholder’s exclusion , given that its classification as an obligation to sell shares or a purchase option that was subject to the termination of employment with the Company was irrelevant, and also held that the requirement of just cause, pursuant to art. 2473 bis of the Italian Civil Code, existed, given that the employment relationship that had led to the allocation of the shareholding, in a context of staff loyalty and incentives, had ceased to exist.


    Having made this assessment, the Court then considered legitimate the provision of the corporate By-laws according to which the liquidation of the participation should not take place at market price, but at a price deduced as a percentage of the value of the Company’s shareholders’ equity.


    In fact, according to the judges of Turin, the criterion provided for by the By-laws was in any event predetermined and objective, as well as specifically agreed upon during the allocation of the shareholdings and – moreover – there is no mandatory provision of the Civil Code which expressly prohibits the By-laws from establishing criteria other than those linked to the market value in order to determine the liquidation value of the shareholding.


    In the appeal proceedings, the Court of Appeal of Turin – even though it deemed that the clause in the By-laws could not be qualified, in a technical sense, as a hypothesis of the shareholder’s exclusion (but rather as a clause entailing a binding-obligatory withdrawal of the shareholder) – confirmed the correctness of the decision taken by the Court, fully adhering to and confirming the motivations of the judgment, disregarding the alleged unlawfulness of the dismissal of the termination of the employment relationship since, according to the Court of Appeal of Turin, the just cause of exclusion has nothing to do with the reasons for dismissal, but is represented by the termination of that work activity which embodies the relationship on which the shareholding depends (and without which the same would not have been acquired).









    Is the intermediary liable for the execution of a transaction in conflict of interest?


    In a recent judgment, the Supreme Court (Civil Court of Cassation, div. I, 15 July 2021, no. 20251) ruled that a transaction entered into by an intermediary – (as defined in the Consolidated Law on Finance, « TUF », including investment companies, banks and all the other intermediaries authorised to provide investment services or activities) – in a situation of conflict of interest that was not disclosed in advance to the investor if the transaction is detrimental to him, is a source of liability for the intermediary; this is because only the prior disclosure and the (albeit tacit) adherence to it by the investor severs the causal link which would otherwise exist between the breach of the specific information duty to which the intermediary is bound – when carrying out a transaction involving a conflict of interest – and the damage suffered by the investor.


    The ruling concerns a unit-linked insurance contract entered into by the investor and the bank, issued by the insurance company, in June 2008. This transaction was concluded in clear conflict of interest and in breach of the disclosure requirements set out in the TUF and in the second-level regulations. The judges of the first and second instance ruled that there was an undisputed conflict of interest and that pursuant to Article 21, paragraph 1 bis of the TUF and Article 23, paragraph 3 of the joint regulation of the Bank of Italy and Consob of 29 October 2007 (the “Joint Regulation”) in the texts in force at the time, the intermediaries had the duty to refrain from carrying out the transaction if they had not informed the client about the conflict of interest (on the basis of the so-called « disclose or abstain » rule).


    In the case at hand, the disclosure of the conflict occurred after the conclusion of the contract, leading to the conviction of the intermediaries involved (i.e. the insurance company and the bank) to pay compensation equal to the difference between the capital invested and the capital received, taking into account both the damage arising from the unlawful conduct and the loss of profit.


    The core of the reasoning in the judgment lies in the Supreme Court’s definition of the so-called « principle of tacit consent« . The intermediaries, in fact, had argued that in 2008 the reference framework implementing the MiFID directives no longer provided for any obligation to abstain for the intermediary which operated in conflict of interest.


    On the contrary, the Court of Cassation held that Article 23 of the Joint Regulation, in the text applicable to that case, had not changed the « disclose or abstain » principle that based the previous discipline of the conflict of interest resulting from Article 27 Consob Regulation No. 11522 of 1 July 1998, but in the context of a reorganization of it based on the principle of prevention, the position of the investor has moved from an approach based on the principle of express consent to the transaction in conflict to an approach based on the principle of tacit or implicit consent.


    The analysis of the legislative provisions (i.e., Article 21, paragraph 1 bis, TUF, Article 23, paragraphs 1, 2 and 3 TUF) has led the Supreme Court to establish the principle that « the intermediary cannot act unless it has placed the client in the condition to make an informed decision, which can only be an expression of consent on his part, since otherwise the intermediary would be in the condition of not being able to carry out the transaction. Rather, the relevant regulatory change is not that the intermediary may disregard the investor’s consent, but that the consent, which previously had to be given expressly, may now be expressed by means of a conduct, such as the fact that the investor, duly informed of the conflict of interests in the transaction, does not oppose it and thus tacitly authorises its conclusion« .


    In essence, « the principle according to which transactions involving a conflict of interest cannot be carried out without the investor’s consent has not been set aside, but has merely undergone a change. Therefore if an intermediary enters a transaction where there is a situation of conflict of interest and has not informed the investor in advance, and thus the investor has not given his tacit consent and the intermediary is therefore not authorised, in the event that the transaction is detrimental to the investor, this would be a source of unquestionable liability for the intermediary« .







    Law Decree n. 118 of 24 August 2021: negotiated settlement for resolving business crises and simplified composition agreement for assets liquidation.


    On 24 August 2021, Law Decree n. 118 of 24 August 2021 « Urgent measures on business crisis and corporate restructuring, as well as further urgent measures on justicial matters », the so-called « Pagni Decree », was published in the Official Gazette n. 202.


    The decree entered into force on 25 August 2021 (art. 29) but some provisions (concerning the negotiated settlement for resolving business crisis and the simplified composition agreement for assets liquidation) will apply from 15 November 2021 (art. 27).


    Article 1 of the text provides for the postponement of the entry into force of the Business Crisis and Insolvency Code. In particular, the decree will enter into force on 16 May 2022, except for Title II of Part One (Alert and Assisted Settlement) which will enter into force on 31 December 2023.


    Articles 2 to 17 introduce and regulate the negotiated settlement for resolving business crises, an institution aimed at commercial and agricultural entrepreneurs who find themselves in conditions of financial or economic imbalance such as to make their crisis or insolvency likely.


    The entrepreneur can ask the Secretary General of the Chamber of Commerce, Industry, Crafts and Agriculture in whose territorial area the company’s registered office is located to appoint an independent expert when the company’s recovery is reasonably likely. The expert facilitates negotiations between the entrepreneur, creditors and any other interested parties in order to find a solution to overcome the crisis conditions.


    For this purpose, a national telematic platform will be set up within which a detailed checklist will be available containing operational indications for the drafting of the recovery plan and a practical test to verify the reasonable feasibility of the recovery.


    These aspects will be defined by executive decree of the Ministry of Justice, which will also provide for the specific training required to the experts (including accountants, lawyers, labour consultants and other persons not registered in professional registers with sufficient experience in restructuring operations).


    Since this is a voluntary access mechanism, the legislator in Article 14 has provided for a series of incentive measures (reduction to the legal rate of interest on tax debts, reduction of tax sanctions, tax instalment plans) to encourage its use by the entrepreneur. The entrepreneur, during the settlement, is “in bonis” and, therefore, retains the powers of ordinary and extraordinary administration (and to make payments) as long as they are not detrimental to the economic-financial sustainability of the business, although he will have to relate to the expert, who may express his dissent and also have it recorded in the companies register.


    Articles 18 and 19 provide for the introduction of the simplified composition agreement for assets liquidation, i.e. a new procedure that may be activated within 60 days from the negative outcome of the negotiations initiated with the negotiated settlement, in particular from the communication to the debtor of the final report drawn up by the expert.


    In this form of simplified arrangement, there is no judicial prior admissibility examination and no creditors’ vote (except for opposition to the approval), and the payment of at least 20% of the total debt to unsecured creditors will not be required. For the homologation judgement, reference is no longer made to the convenience of the arrangement compared to bankruptcy, but to the absence of damage and the assurance of a benefit for each creditor.


    Article 20 of the decree-law concerns some amendments to the bankruptcy law applicable as of now (thus representing a partial anticipation of some of the innovations provided for in the Business Crisis and Insolvency Code). Among these, the following provisions are particularly innovative: (i) Art. 182-septies on extended effectiveness restructuring agreements (now extended to all categories of homogeneous creditors, with the possibility to bind 25% of the claims, having a majority on the remaining ones, if the agreement provides for the continuation of the business and dissenting creditors are not penalised with respect to the alternatives); (ii) Art. 182-octies on the standstill agreement (extended to all types of creditors, it provides for the postponement of credit expiry dates and any other measure that does not entail the waiver of credit under certain conditions); and (iii) Art. 182-novies on facilitated agreements for which the percentage of adhering creditors decreases from 60 to 30% if the debtor: a) has waived the standstill; b) has not submitted the arrangement with reservation of presenting the plan; c) has not asked for the suspension of enforcement actions.







    Electric mobility: new measures for the development of recharging infrastructures.


    The so-called Simplification Decree Law and the Simplification Decree Law-bis have introduced a number of measures to promote the dissemination of recharging stations for electric vehicles.


    In the panorama of interventions aimed at promoting the development of more environmentally friendly communities, European and national policies have also intervened in recent years in the area of mobility and in particular electric vehicles.


    Regarding the supply of motor vehicles, the European Union has intervened with Regulation (EU) 2019/631, which defines performance standards for CO2 emissions from new passenger cars and light commercial vehicles. Emission limits are becoming increasingly stringent and will remain so in the future as the regulations are revised. Therefore, this regulation has the « direct » effect of reducing CO2 emissions and the « indirect » effect of incentivizing manufacturers to develop the market for electric vehicles, which are exempt from the restrictions concerning CO2 emissions.


    In order to enable the creation and development of the market and circulation of electric vehicles, Directive 2014/94/EU (also) regulated the criteria for the implementation of electric recharging infrastructures.


    The Directive introduced some principles, taken up by the transposing Legislative Decree 16/12/2016 n. 257:


    – the development and operation of recharging infrastructures in publicly accessible locations must be motivated by the principles of a competitive market with open access to all parties that own and operate recharging points

    – electricity distributors shall be obliged to cooperate on a non-discriminatory basis with any operator of publicly accessible recharging points

    – owners of electric vehicles, must be able to charge at any point « without the need to enter into a contract with the electricity supplier or recharging operators »


    The relationship between the market players is identified as follows:


    – the relationship between the operator of the recharging point and the electricity supplier is one of buying and selling a good. The operators of the recharging point are, therefore, considered end consumers who can purchase electricity from any supplier in the European Union and are authorized to provide customers with electric vehicle recharging services on a contractual basis, also in the name and on behalf of other service providers (multi-service)

    – the relationship between the operator of the recharging point and the owner of the vehicle constitutes a provision of service.


    The Simplification Decree-Law no. 76 of July 16, 2020, converted into Law no. 120 of September 11, 2020, introduced (art. 57) some measures to simplify the rules for the construction of electric vehicle recharging points and stations:


    – the construction of the infrastructures must take place in accordance with the rules set forth by the Highway Code (Legislative Decree no. 285/1992) and its Regulations of execution and implementation (Presidential Decree no. 495/1992)

    – the principle of free and non-discriminatory access to all users, in private and public areas, must be protected


    Municipalities are required to regulate the installation, implementation and management of public access recharging infrastructures, establishing the location and quantification in accordance with regional and municipal planning tools. Two interesting provisions are the following:

    – the fee for the occupation of public land must be calculated on the space occupied by the recharging infrastructures, without considering the parking stalls of motor vehicles that shall remain available for the public

    – the Municipalities may provide for the reduction or exemption of the fee for the occupation of public land and of the tax for the occupation of public spaces and areas for the recharging points, in the event that they supply energy from certified renewable energy sources


    The National Recovery and Resilience Plan (PNRR) has also dedicated a specific intervention to the investment (4.3) for the development of electric recharging infrastructures: the intervention is aimed at the development of charging points on highways and in urban centers, as well as experimental charging stations with energy storage technologies.


    Consequently, the so-called Simplification Decree bis (Decree-Law no. 77 of May 31, 2021), converted into Law no. 108 of July 29, 2021, has provided (art. 32-ter) some simplification measures for the creation of recharging infrastructures. In particular:


    – the installation of recharging infrastructures for electric vehicles with public access is not subject to the issuance of a building permit and is considered as a building activity that does not necessitate an authorization

    – the application for the occupation of land and the construction of infrastructures must be submitted to the entity that owns the street

    – a declaration, which shows the absence or presence of interference with the telecommunications channels and compliance with the rules governing the transmission and distribution of electricity, shall be attached to the application. The declaration is addressed to the competent Inspectorate of the Ministry for Economic Development

    – the relevant connection works to the power distribution network are previously agreed with the service dealer

    – the entity carrying out the assessment, pursuant to art. 14-bis of Law 241/1990, shall within 30 days, issue a permit for the construction and occupation of public land

    – the minimum duration of the permit is 10 years for the infrastructure provider, in addition to a provision with unlimited duration, addressed to power distribution service provider, for the construction of the connection works


    In 2021 many market indicators (electric cars sold, recharges carried out, kWh supplied) have grown considerably and new initiatives have been promoted in a supply chain that involves different types of operators. A steady increase is expected to continue in the coming years, which can be supported not only by suitable and reasonable incentives for the purchase and production of vehicles, but also by simplified measures for the development of public and private infrastructures.







    Deductibility of losses on bad-debts: new guidelines from the Italian Revenue Office.


    The Italian Revenue Office, through answer to ruling no. 342 of May 13, 2021, returned to the issue of the deductibility for IRES purposes of losses on bad debts of small amounts that expired from more than six months, clarifying (once again) the conditions required by the legislator and the methods that can adopted to identify the taxable period of their deductibility.


    The tax regulations regarding the deductibility of losses on bad debts, for entities other than banks, financial institutions and insurance companies, are included in Art. 101, paragraph 5 of the Consolidated Income Tax Code (“TUIR”), according to which losses on bad debts are generally deductible if resulting from certain and specific elements.


    With regard to the existence of these requirements, in addition to the cases of bad debts due from insolvent parties and time-barred receivables, a specific provision is set forth by Art. 101, paragraph 5 of the TUIR for the so-called « mini-receivables » providing that certain and specific elements exist in any case when the receivable is of a reasonable amount and a period of six months has elapsed since the due date for the payment of the credit itself.


    The same regulation specifies that the receivable is considered reasonable when it does not exceed the amount of Euro 5,000 for larger companies (i.e. those companies with a revenue not less than Euro 100 million) and no more than Euro 2,500 for all other companies. It is also envisaged that the specific elements that determine the deductibility of the loss are considered to be present in all cases where the receivables were written off from the financial statements following the application of the applicable accounting standards.


    Through the answer to ruling no. 342/2021, the Italian Revenue Office, in confirming the previous clarifications provided for by Circular no. 26/E of August 1, 2013, and Circular no. 14/E of June 4, 2014, specified that:


    a) first of all, with regard to bad debts that meet the deductibility requirements set forth by Art. 101, paragraph 5 of the TUIR and for the purposes of the “tax provision fund”, write-downs and provisions in the financial statements shall be equally treated.

    Therefore, it follows that provisions in the financial statements made for bad debts meet the requirements of prior allocation pursuant to Art. 109, paragraph 4 of the TUIR, meaning that « mini-receivables » registered in the profit and loss account as provisions, are immediately deductible if they meet the requirements of Art. 101, paragraph 5 of the TUIR;


    b) if the receivable has never been written down, the choice of the taxable period in which the deduction of the related negative component become relevant for tax purposes is left up to the creditor company, with the only time limit being the taxable period during which the receivable is cancelled from the financial statements.







    What lessons can companies learn from WhatsApp’s €225 million privacy fine?


    Whatsapp has received a €225 million privacy fine for failing to adequately inform data subjects that the company was transferring data to Facebook and its subsidiaries.


    It is important to underline that WhatsApp has formed part of the Facebook group since 2014.


    The important fine derives, in concrete terms, from the violation of the obligation of transparency that must be respected by all data controllers, together with other violations related to the correct information of the data subjects. For example, the generic use of the term ‘we’ to refer to certain companies (which ones?) belonging to the Facebook group benefiting from such data transfers.


    The violation of the general principle of transparency alone has resulted in a sanction, pursuant to Art. 5. General Data Protection Regulation (« GDPR« ) amounting to 90 million (out of 225 imposed).


    A further relevant element of the present case is the intervention of the European Data Protection Board (« EDPB »), which ordered the Irish Data Protection Authority to increase the originally proposed fine from EUR 50 million to EUR 225 million.


    The Irish EDPB acted as the leading authority coordinating the European Data Protection Authorities’ investigations relating to WhatsApp’s processing of European citizens’ data and the exchange of such data with Facebook.


    The following conclusions and lessons for data-processing companies can be drawn from this sanction:


    1. the European Data Protection Board has become and will increasingly become the central pivot for a correct and compliant application of the GDPR, thus rendering obsolete those establishments in countries where privacy authorities are not particularly active;


    2. it is essential to comply with the principles of the GDPR, set out in Article 5, including the principle of transparency, to avoid the risk of very heavy fines;


    3. particular attention must be paid to the creation of a privacy information notice, a fundamental tool available to data controllers to fulfil their obligations under the GDPR;


    4. prepare granular information for data subjects, allowing for appropriate in-depth information where this is necessary.






    DISCLAIMER: This newsletter merely provides general information and does not constitute legal advice of any kind from Macchi di Cellere Gangemi. The newsletter does not replace individual legal consultation. Macchi di Cellere Gangemi assumes no liability whatsoever for the content and correctness of the newsletter.




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