NEGOTIATED SETTLEMENTS: AN OVERVIEW OF THE MOST RECENT CASE LAW.
Despite the fact that this is a very recently introduced institution, some Courts have already had the opportunity to express their opinion on specific aspects. It is useful to briefly review the main provisions filed to date concerning the negotiated settlement and, with the exception of that of the Court of Treviso referred to predeductible loans, almost exclusively concern the issue of protective and precautionary measures under Articles 6 and 7 of Decree Law 118/21.
It should be noted that the institution of the negotiated settlement was introduced by Decree-Law 118/2021 “Urgent measures concerning business crisis and corporate rehabilitation, as well as other urgent measures in the field of justice”, published in the Official Gazette no. 202 of 24 August 2021 and converted into Law 147/2021 the latter published in the Official Gazette no. 254 of 23 October 2021.
The negotiated settlement provides that a company in a state of financial or economic imbalance may voluntarily request the appointment of an expert to facilitate negotiations between the entrepreneur in crisis and creditors and other possible stakeholders, with a view to an agreement that restructures the company and restores its economic balance.
Among the characteristics of the institution are the confidentiality and essentially private nature of the reorganisation process: except for particular needs of the entrepreneur (the suspension of the rules on significant losses of capital) or specific circumstances and developments of the procedure (e.g. the dissent of the expert with respect to an act of the entrepreneur), in fact, there are no publications in the Company Register or involvement of the Court. However, one of the cases in which the Court is called upon to rule concerns the hypothesis in which the entrepreneur requests, with the petition for the appointment of the expert or with a subsequent petition, the application of asset protection measures pursuant to Articles 6 and 7 of Decree-Law 118/21.
From the day of publication of the petition in the commercial register, creditors may not (i) commence or continue executive and precautionary actions on the assets or on the assets and rights with which the business is carried on, (ii) stop payments, (iii) unilaterally refuse to perform pending contracts, cause their termination, anticipate their expiry or modify them to the detriment of the entrepreneur. In addition, a judgment declaring bankruptcy or insolvency may not be handed down until the conclusion of negotiations or the closure of the negotiated settlement.
Article 7 provides that the entrepreneur must file an appeal with the Court requesting the confirmation or modification of the protective measures and, where necessary, the adoption of the precautionary measures necessary to complete the negotiations. Together with the appeal, he must file: the balance sheets, an updated balance sheet and financial situation, the list of creditors, a financial plan, a self-certification attesting, on the basis of reasonable and proportional criteria, that the company can be restored, the name of the expert. Within 10 days from the filing of the appeal the court sets a hearing, during which it proceeds with the necessary investigations in relation to the precautionary measures requested and establishes the duration, not less than thirty and not more than one hundred and twenty days, of the protective measures and, if necessary, of the precautionary measures ordered. At the request of the entrepreneur, one or more creditors or on the recommendation of the expert, the judge may, at any time, after hearing the interested parties, revoke the protective and precautionary measures, or shorten their duration, when they do not meet the objective of ensuring the successful outcome of the negotiations or appear disproportionate to the prejudice caused to the petitioning creditors.
In recent weeks, a number of interesting decisions have been published by judges on the outcome of appeals seeking confirmation or modification of protective measures.
In a decision of 2 December 2021, the Tribunal of Brescia clarified that the protective measures under Article 6 take effect only from the moment of publication in the Companies Register of the application for the measures and the acceptance of the appointment of the expert. Since, in the present case, the appellant had stated that he had requested the appointment of the expert but had failed to show that the expert had been appointed, this was the only reason for declaring the action inadmissible under Article 7 of Decree-Law No 118/21. With the clarification that the protective effects had not yet been produced. The measure is distinguished by the fact that the Tribunal of Brescia has established two other ratio decidendi concerning the documents that the entrepreneur must file in the act in which he requests to confirm the effectiveness of the measures and, respectively, the admissibility of the appeal where an application for arrangement has simply been filed or even accepted (the anti-abuse logic has imposed access to the second solution).
The decision of the Tribunal of Rome of 24 December 2021 contains an interesting reference to the addressees of the notification of the appeal for the confirmation of the measures in question and of the decree setting the hearing: they must be notified to the expert and personally to each of the creditors, other than employees, who have initiated executive or precautionary proceedings against the appellant or have intervened in the relevant proceedings as well as to any addressees of specific precautionary measures.
The Tribunal of Florence, in its decision of 29 December 2021, also took the same line, stating that if the request for protective measures is addressed “erga omnes” and does not refer to specific persons, the notification of the decree setting the hearing for confirmation must be ordered against the expert and the creditors who have initiated enforcement or precautionary proceedings or filed an appeal for the declaration of bankruptcy. It also adds that for the purposes of confirmation of the protective measures requested by the entrepreneur, if the negotiations have not yet been fully commenced, but are in the process of being commenced, and/or the reorganisation plan is under construction, but a forecast/budget for the next three years has already been filed, it is sufficient that the expert’s opinion shows the reliability and correctness of the updated accounting situation attached to the application for appointment, the completeness of the picture provided by the entrepreneur and the adequacy of the administrative structure of the company.
In the decision of the Court of Milan of 28 December 2021, it is stated that if the documentary allegations produced by the debtor in support of the request for confirmation of the protective measures are deficient, it is the responsibility of the court, when setting the hearing, to exercise the power-duty to obtain the integration of the documentation, assigning the entrepreneur a deadline for further filing. According to the Tribunal of Milan, this would be justified, not only by the obvious legislative favour for the composition, but also by the analogical applicability of the principles under article 162, paragraph 1, of the Bankruptcy Law and article 9, paragraph 3b, Law no. 3/2012.
The most recent ruling was made by the Bergamo Court, which, on 19 January 2022, specified that in the procedure for the confirmation of protective measures pursuant to Article 7, the cross-examination must include all the persons whose financial and procedural legal spheres may be affected by the measure to be adopted.
Finally, it is worth mentioning a decision of 22 December 2021 by the Court of Treviso which, even if it does not deal specifically with protective measures, still deals with the negotiated settlement. According to the Court of Treviso, the lack of the expert’s appointment is not an obstacle to the authorisation of the company to contract pre-deductible loans, according to article 10 of the Decree Law 118/2021. Indeed, unlike art. 7 of the decree in question, which expressly requires the expert’s acceptance for the confirmation of precautionary and protective measures, art. 10 merely requires a verification of the functionality of the act with respect to business continuity and the best satisfaction of creditors.
s.rossi@macchi-gangemi.com
g.bonfante@macchi-gangemi.com
ANOTHER RULING IN FAVOUR OF SHAPE MARKS: FULL STEAM AHEAD BULLI VAN!
The Second Board of Appeal before the EUIPO – European Union Intellectual Property Office has upheld the opposition filed by Volkswagen AG against the European Union trademark application submitted by European Flipper/Pinball Factory GmbH. The opposition was based on two registrations for 3D signs depicting VW’s iconic van, also known as the “Bulli”, an object of desire and companion of adventures for many travellers and four-wheel enthusiasts since its first “T1” version designed in the early 1950’s.
By means of a recent decision delivered on December 15th, 2021 in case R 609/2021-2 (hereinafter, the “Decision”), the Second Board of Appeal of the EUIPO (the “BoA”) has finally upheld the opposition filed by Volkswagen Aktiengesellschaft (“VW” or the “Opponent”) against the European Union trademark (EUTM) application No. 18 129 758 submitted by European Flipper/Pinball Factory GmbH (the “Applicant”) for goods and services in classes 11, 12, 20, 21, 39 of the Nice Classification (the “Opposite Sign”).
The opposition, pursuant to Article 8(1)(b) of Regulation (EU) 2017/1001 on the European Union Trademark (EUTMR), was based on two registrations for 3D signs depicting VW’s iconic van, also known as the “Bulli” (the “Earlier Trademarks”).
In the first instance, the Opposition Division had rejected VW’s arguments in full by observing that, although the goods and services concerned by the application were identical (or similar, depending on the class) to the goods and services covered by the Earlier Trademarks, the signs under comparison had a low degree of visual similarity and an average degree of conceptual similarity, and it was not possible to carry out an aural comparison, given the lack of verbal elements within the Earlier Trademarks.
Against this background, the Opposition Division had concluded that the similarities between the signs under comparison were not sufficient to give rise to a likelihood of confusion and that this conclusion was also supported by the low degree of distinctiveness of the Earlier Trademarks in relation to “vehicles” in class 12, to the extent that the relevant public was perfectly capable of perceiving the signs as originating from different undertakings.
On 01.04.2021, the Opponent filed an appeal against the decision delivered on February 1st, 2021 (the “Contested Decision”), by claiming, inter alia, that (i) the signs under comparison are identical in the reproduction of the front view of a bus; (ii) in the Opposite Sign, the word element “Cultcamper” is not to be regarded as dominant, since it is not only descriptive in relation to the goods it has been applied for, but also explicitly alludes to VW vehicles to such an extent that the relevant public will be led to recognise the Earlier Trademarks in the visual – and dominant – element of the Opposite Sign, reproducing “identically” the front view of the shape of the Earlier Trademarks and assuming, for that effect, a sort of link between the Opponent, generally known as one of the greatest car manufacturers in Europe, and the products distinguished by the Opposing Sign (paragraph 11).
By upholding VW’s appeal, the BoA found that the Contested Decision had erred in its assessment of the distinctiveness of the Earlier Trademarks, noting that the five different perspectives of the camper van making up the 3D signs owned by the Opponent were not to be considered in isolation, pointing out that a shape mark should only be considered devoid of distinctive character “if it does not depart significantly from the norms and customs of the sector concerned” (paragraph 25).
On this point, neither the Opposition Division nor the Applicant had put forward valid arguments in support of this conclusion. On the contrary, the BoA found the Earlier Trademarks to be distinctive, in particular, “because the front of the van is characterized by a divided windshield and the curved V-shape on the bonnet with the circular headlights on each side” (paragraph 26).
In addition, the BoA found that the figurative element and the word element “Cultcamper” within the Opposite Sign were to be considered co-dominant from a visual perspective (paragraph 28) and that the front view of the Earlier Trademarks was “almost identically reproduced in the figurative element of the contested sign” except for the only differences residing in “the small peace symbol, which is hardly noticeable, and the colour in the contested sign” (paragraph 29).
The above being said, the BoA concluded that there was a likelihood of confusion between the signs under comparison, noting that “faced with the image of the mark applied for, the relevant English-speaking public in the EU will perceive that mark as another version of the earlier marks, rather than as a separate trademark with a different commercial origin” (paragraph 39).
It is also interesting to note that, in the present case, the BoA has limited itself to upholding the opposition on the basis of a finding of inherent distinctiveness of the Earlier Trademarks, hence showing once again how the criterion of significant departure from the norms and customs of the relevant sector, which is a fundamental ground for assessing the likelihood of confusion pursuant to Article 8(1)(b) EUTMR, can also be applied to the shape of a registered product.
m.baccarelli@macchi-gangemi.com
m.lonero@macchi-gangemi.com
FULL AUDIO-VIDEO CONFERENCE SHAREHOLDERS’ MEETING (AND NOT ONLY) AFTER COVID EMERGENCY.
In the frame of the emergency regulations issued with the aim to face the COVID-19 pandemic situation, the Italian legislator allowed (pursuant to article 106 of Law Decree no. 18/2020) that the shareholders’ meetings of Italian joint-stock companies and limited liability companies, among others, be convened without indicating a physical location and may therefore be held, even in derogation from the by-laws provisions, in full audio-video conference mode, i.e. exclusively via telecommunications means.
According to the Milan Notarial Council (with its Recommendation no. 200 of November 23, 2021) the aforesaid methods are legitime regardless of the existence of the Covid-19’s emergency.
To reach this principle the Milanese Notaries have assumed that, generally speaking, holding the shareholders’ meeting in full audio-video conference is not contrary to the applicable provisions of the Italian Civil Code. Moreover, the technological solutions that are currently available in order to hold meetings also exclusively “remotely” would not imply any prejudice to the principles of collegiality, good faith and equal treatment of the shareholders.
In light of the above, also after the end of the emergency, the Directors shall be considered entitled to call the shareholders’ meeting also exclusively by means of audio-video conference whenever the By-laws already provide for (pursuant to art. 2370, paragraph 4, of the Italian Civil Code) the generic possibility for the shareholders to intervene in the meeting by means of telecommunication.
It goes without saying that it shall be also affirmed the legitimacy of the By-laws clauses which not only allow shareholders to intervene by means of telecommunication, but also expressly provide for the right (if not the obligation) of the Directors (or, in any case, of the persons in charge to call the meeting) to convene the meeting in full audio-video conference or with “mixed” solutions of physical location and telecommunications means.
The Milan Notarial Council also specifies that the same principles set out above shall be considered applicable also to the meetings of the other corporate bodies, such as the Board of Directors and the Board of Statutory Auditors.
The Notarial Recommendation at issue seems to pave the way for more flexible and efficient practical methods of holding corporate meetings, and respective provisions in the By-laws. It will be interesting to see whether, also on this occasion, the vision of the Milanese Notaries will anticipate possible legislative reforms, as already happened in 2003 with the introduction, by means of the amendment to article 2370, paragraph 4, of the Italian Civil Code, of the possibility for the shareholders to take part in the meeting by means of telecommunications, which was “suggested”, at the time, by the Milan Notarial Council Recommendation no. I of January 16, 2001.
Up to that time it cannot be excluded that meetings convened and held “remotely” only, without this being provided for in the By-laws provisions, may be challenged for annulment vice. However, it is disputable whether this type of challenge be successful, given the increasingly massive use of audio-visual technologies also within the life of companies.
p.orzalesi@macchi-gangemi.com
a.frau@macchi-gangemi.com
ENEL SANCTIONED BY THE PRIVACY GUARANTOR FOR OVER 26 MILLION EUROS FOR UNLAWFUL PROCESSING OF PERSONAL DATA FOR TELEMARKETING PURPOSES.
The Authority for the protection of personal data (“Garante” or “Authority“) has recently fined Enel Energia with a sanction exceeding 26.5 million euros due to the unlawful processing of personal data used by the company and its call centers for telemarketing purposes and a series of corrective measures in order to comply with the legislation regarding protection of personal data.
The sanctioning measure came at the end of an articulated activity initiated by the Authority following hundreds of reports and complaints from customers who complained of:
1. the receipt of unwanted promotional telephone calls, including on a pre-recorded disc;
2. the difficulty in exercising their rights regarding personal data protection; and
3. problems arising from the management of data within the scope of energy supply services, including processing carried out in the reserved area of the company’s website and app.
Through its inspection units, the office of the Data Protection Authority verified how the phenomenon of telemarketing in the energy sector registered a sharp and worrying increase as the deadline for transition from the protected market for electricity and gas to the free market was approaching. During the analysis carried out prior to the issuing of the sanction, an alarming, systematic, intense, and increasingly aggressive phenomenon of unwanted promotional telephone calls emerged, without adequate consent from the user, to reserved users or those entered in the opposition register. In addition, there was a slow (or absent) management in replying to claims that requested exercise of rights to access personal data or opposition to processing for marketing purposes.
At the end of its activity, in confirming the violation of the legislation on the protection of personal data, the Authority imposed a penalty of 26,513,977.00 euros on the company.
The Authority also ordered Enel Energia to adapt the processing of personal data carried out by its sales network, using suitable measures to demonstrate and keep track of the fact that the activation of offers and services and the activation of contracts is only carried out following promotional contacts on telephone numbers recorded in the Register of Communication Operators.
Enel Energia shall also implement additional technical and organizational measures to manage data subjects’ requests to exercise their rights, in particular the right to object to promotional purposes, so as to provide them with feedback by no later than 30 days from their request, as established by Regulation 679/2016 better known as GDPR.
Finally, the Company will have to inform the Authority which initiatives it intends to adopt in the future to comply with the requirements of the measure.
The sanction is only the latest in a long series of measures taken against companies that operate in a non-compliant manner in telemarketing and highlights how important it is to comply with the regulations of the sector, in order to avoid both economic and image damages.
r.demarco@macchi-gangemi.com
f.montanari@macchi-gangemi.com
CAN THE “AVVISO BONARIO” BE CHALLENGED?
The “avviso bonario” is an irregularity notice which can be challenged before the tax court even if this possibility is not expressly listed in the regulations in force: it is, in fact, a measure containing a complete tax claim. This principle has been confirmed by the Court of Cassation in its ordinance No. 3466 of 18 November 2020, filed on 11 February 2021 (likewise, decisions Nos. 25297/14, 22536/2020).
It should be noted that, for income tax purposes, pursuant to article 36-bis of Presidential Decree No. 600/1973, the Tax Authorities, using special automated procedures, may, by the beginning of the period for the submission of tax returns for the following year, settle taxes and contributions due, as well as any refunds due on the basis of the tax returns submitted by taxpayers and withholding agents (for VAT purposes, the automatic control of tax returns has its legal source in article 54-bis of Presidential Decree No. 633/1972).
The possibility to challenge the “avviso bonario” irregularity notice sent as a result of automated controls has not always been considered possible. Indeed, on the basis of the literal interpretation of Article 19 of Legislative Decree No. 546/1992, which sets out an exhaustive list of the acts which may be challenged before the courts (and which does not include the “avviso bonario”), the Revenue Office, referring to some rulings of the Court of Cassation, has excluded the possibility to challenge the irregularity notices (Resolution No. 110/E/2010).
The orientation expressed by the Revenue Office has been now refuted by the Court of Cassation, most recently in the above-mentioned ordinance No. 3466 of 2021. The case examined by the Court of Cassation concerned an irregularity notice relating to a penalty of 30% for late payment of IRAP, which was paid by the appellant company by means of the “voluntary disclosure”. The first and second instance judgments of said case concluded that the appeal was inadmissible since the irregularity notice was not included among the acts that can be challenged under article 19 of Legislative Decree 546 of 31 December 1992: the judges held that the irregularity notice represents an invitation sent to the taxpayer to clarify his tax position, so that the notice does not entail a certain and final claim and, therefore, cannot be challenged.
The Court of Cassation, on the other hand, considers that the list of acts that can be challenged contained in article 19 of Legislative Decree No. 546 of 1992, although it is to be considered exhaustive, is to be interpreted in a broad sense, with the taxpayer having the right to appeal to the tax court against all the acts adopted by the tax authorities, acts that bring to the taxpayer’s attention a clearly identified tax claim with an explanation of the concrete reasons that support it. This is in accordance with the constitutional rules of protection of the taxpayer and good performance of the public administration.
Hence the right to appeal to the tax judge against irregularity notices sent as a result of an automated control pursuant to article 36-bis of Presidential Decree No. 600 of 1973.
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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