Italian bankruptcy law has undergone extensive reform in recent years, aimed at increasing the efficiency of the bankruptcy system by reducing the incidence of business liquidations in order to limit their high social cost in terms of value destruction. The underlying focus of the Italian bankruptcy system has, therefore, generally shifted to incentivise debt restructurings and reorganisations of failing businesses.
Prior to 2005, the Italian bankruptcy system was centred on the idea that failed businesses should be liquidated and insolvent debtors expelled from the economic system.
