185000000 IT Holding Finance SA

a maximum of two years); (ii) a program of asset disposals (lasting a maximum of one year); (iii) moratorium
on actions by creditors; (iv) appointment by the Government of a receiver (commissario straordinario) to
substitute the existing management in the company’s operations.
• Bankruptcy proceeding (fallimento). A request to declare a debtor bankrupt and to commence a bankruptcy
proceeding (fallimento) for the liquidation of a debtor can be made by the debtor, a creditor, a court or a public
prosecutor. The request must be approved by an insolvency court. Upon a declaration of bankruptcy: (i) subject
to certain exceptions, all actions of creditors are stayed and creditors must file claims within a defined period;
(ii) the administration of the debtor and the management of its assets pass from the debtor to the receiver; and
(iii) any action taken by the debtor after a declaration of bankruptcy with respect to a creditor is ineffective.
The bankruptcy proceeding is carried out and supervised by a court-appointed receiver, a deputy judge and a
creditors’ committee. The receiver is not a representative of the creditors. The receiver is responsible for the
liquidation of the assets of the debtor for the satisfaction of creditors. The proceeds from the liquidation are
distributed in accordance with statutory priority. In Italy, liquidation proceedings can take a considerable
amount of time, particularly in cases where the debtor’s assets include real property. As described below,
Italian insolvency law provides for priority to the payment of certain preferential creditors, including
employees and the Italian treasury.
• Post-bankruptcy composition with creditors (concordato fallimentare). A bankruptcy (fallimento) can be
terminated prior to the receiver’s liquidation by a debtor filing a petition to the insolvency court for a postbankruptcy
composition with creditors (concordato fallimentare). In such a petition, the debtor must indicate:
(i) the percentage of the unsecured claims that will be paid; (ii) the timing of the repayment; and (iii) the
guarantees offered with respect to such repayment. The debtor must pay all debts of the secured creditors. The
post-bankruptcy composition requires the approval of a majority, both in number and in amount of claims, of
the debtor’s unsecured creditors and the court.
In Italy, the highest priority claims (after the costs of the proceedings have been paid and other obligations
undertaken by the receiver have been satisfied) include the claims of the Italian tax authorities and social security
administrators and claims for employee wages. Secured creditors are repaid next with any remaining funds and
payment of insecured creditors follows.
As in other jurisdictions, there are so-called “claw-back” or avoidance provisions under Italian law that may give
rise to the revocation of payments or the setting aside of grants of security interests made by the debtor prior to the
declaration of bankruptcy. Claw-back rules under Italian law are normally considered to be particularly favorable
to the trustee in bankruptcy in comparison to the rules applicable in the United States.
In a bankruptcy proceeding (fallimento), Italian law provides for a claw-back period of up to two years. A
bankruptcy receiver can request that certain transactions of the debtor during the two year-period preceding the
declaration of bankruptcy be voided. In certain cases, the claw-back period can be extended to up to five years.
A comprehensive reform of Italian bankruptcy laws is expected in the near future.
Luxembourg
Under Luxembourg insolvency laws, your ability to receive payment on the Notes may be more limited than it
would be under U.S. bankruptcy laws. Under Luxembourg law, the following types of proceedings (collectively
referred to as insolvency proceedings) may be opened against an entity such as the Issuer having its registered
office or center of main interest in Luxembourg:
• Bankruptcy proceedings (faillite), the opening of which may be requested by a company or by any of its
creditors. Following such a request, the courts having jurisdiction may open bankruptcy proceedings if a
company (i) stopped making payments as they became due (cessation des paiements) and (ii) has lost its
commercial creditworthiness. If a court finds that these conditions are satisfied, it may also open bankruptcy
proceedings, absent a request made by the company or a creditor. The main effect of such proceedings is the
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