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After Cassazione 7663/2026, a single consenting creditor class is enough to force confirmation of an Italian restructuring plan — even if your bank voted no
Your Italian borrower files a court-supervised composition with creditors — the concordato preventivo, Italy's closest equivalent to a Chapter 11 reorganisation. You hold senior secured debt. You vote no, along with every other creditor class except one small trade-creditor group that votes yes. Under the framework you know from Chapter 11, that picture looks like a plan going nowhere: no impaired class has accepted it. Six weeks later, the court confirms the plan over your objection.
This is not a hypothetical. It is the operating reality after Italian Court of Cassation, Third Civil Division, Judgment No. 7663 of 30 March 2026 (Cass. civ., Sez. III, sent. 30 marzo 2026 n. 7663), which resolved a split among Italian lower courts: how many creditor classes must consent to trigger forced confirmation — the court-ordered approval process known as omologazione forzosa — of a continuity concordato preventivo? The answer the Cassazione gave was one.
Yes. Under Art. 112 of the Code of Business Crisis and Insolvency (Codice della crisi d'impresa e dell'insolvenza, CCII), as amended by Legislative Decree 136/2024, a court may confirm a continuity concordato preventivo on a forced basis when at least one class of creditors has voted in favour and the plan satisfies two substantive tests: the absolute-priority test and the best-interest-of-creditors test. The Italian Court of Cassation in Sentence No. 7663/2026 confirmed that the statutory threshold of "at least one class" means exactly that — a bare minimum, not a qualified majority of classes.
The court's reasoning was textual. Art. 112(1)(a) CCII states the condition in unambiguous Italian: "almeno una classe di creditori abbia approvato il piano" — at least one class of creditors must have approved the plan. The Cassazione declined to read in a requirement that the consenting class be "meaningful" in size, value, or seniority. The dissenting classes, including secured banks, have no procedural veto. Their recourse is substantive: they must attack the plan on the merits of the two statutory tests.
This is the comparison every US practitioner reaches for — and where the most dangerous errors are made.
Under 11 U.S.C. § 1129(a)(10), a Chapter 11 plan requires at least one impaired class of claims to have accepted the plan, determined without counting any insider votes. US practitioners know this as a real threshold: the accepting class must be impaired in the technical Bankruptcy Code sense, and its acceptance must reflect genuine creditor support, not a manufactured class. US courts have developed a body of case law on artificial class gerrymandering specifically to prevent debtors from manufacturing consent.
Italian law, unlike US Chapter 11, has no equivalent technical definition of "impairment" as a precondition for a class's vote to count. Under the CCII, a class votes on whether it approves the plan; its approval counts for the Art. 112 threshold regardless of whether it receives less than full contractual entitlement. This means a debtor in Italy can, in principle, design its class structure so that a trade-creditor group — holding, say, €500,000 of a €50 million total claim pool — forms a consenting class. That class's approval satisfies the statutory minimum. The rest of the creditor body is then bound if the plan passes the substantive tests.
There is a safeguard against pure gerrymandering in Art. 85 CCII, which sets minimum criteria for class composition (homogeneous economic interests, comparable legal standing). But unlike the US courts' approach, Italian courts have not yet developed a robust anti-gerrymandering doctrine with predictable outcomes. The risk of a thinly-consenting class is real.
Nemo plus iuris ad alium transferre potest quam ipse habet — no one can transfer more rights than they themselves hold. This maxim captures the logic behind the absolute-priority test, though Italian restructuring law applies it with its own texture.
Art. 112(1)(b) CCII requires, as a condition of forced confirmation, that no class of creditors receives more than the full value of its admitted claim. This is the Italian expression of what US practitioners call the "absolute priority rule." A senior secured lender may not be crammed down below its secured value if a junior class receives anything of value. In that respect, Italy mirrors the Chapter 11 structure.
Where Italian practice diverges is in evidence standards. In a contested Chapter 11 confirmation, US courts receive detailed valuation reports, expert testimony, and competing financial models; the debtor bears the burden of proof by a preponderance of evidence. Italian homologation courts — operating under Art. 48 CCII and the procedural rules of the tribunale (the first-instance civil court with commercial jurisdiction, equivalent in function to a US Bankruptcy Court for these purposes) — typically review the independent expert's attestation report (relazione dell'attestatore) as the primary valuation evidence. That attestor is appointed or accepted by the debtor. There is no US-style discovery process for competing creditors. A dissenting foreign bank cannot compel disclosure of internal financial projections the way it could in a Chapter 11 contested confirmation.
This evidential asymmetry is, in our assessment, the most underestimated risk for US creditors in Italian restructurings. The battleground has shifted from the vote to the homologation hearing, but the weapons available at that hearing are not the same.
The loss of a procedural veto does not mean the loss of all rights. After Cassazione 7663/2026, the strategy for a dissenting US bank or bondholder must be rebuilt around three fronts.
First, the best-interest test under Art. 112(1)(c) CCII: dissenting unsecured classes must receive at least what they would recover in liquidazione giudiziale — the Italian judicial liquidation procedure, roughly equivalent to a Chapter 7 liquidation. If the liquidation recovery is higher than what the plan offers, confirmation must be denied. This requires the dissenting creditor to build its own liquidation analysis, independently of the attestor's report, and present it to the homologation court. Italian courts have accepted creditor-commissioned expert reports in this context, though the procedural framework for filing them is tight: Art. 48 CCII gives creditors the right to file observations within thirty days of the plan's filing, and to oppose confirmation within a further fifteen days.
Second, the absolute-priority test under Art. 112(1)(b) CCII: if a junior class — equity holders, subordinated creditors — receives any distribution while a dissenting senior class does not receive full value, the plan fails the test. A secured bank should map every distribution in the plan against the priority waterfall and challenge any inversion.
Third, challenge to class composition under Art. 85 CCII: if the consenting class was structured with creditors whose interests are not genuinely homogeneous, or whose legal position differs materially from others placed in different classes, the class formation itself can be challenged before the homologation court.
The window for all of these is short. From the date of the creditor vote, the homologation process moves quickly — typically reaching a court hearing within sixty to ninety days of the vote closing, though in complex cases the tribunal may extend this. There is no equivalent of a US "plan confirmation brief" with extended discovery. A US institution that waits for its New York counsel to "get up to speed" on Italian procedure will almost certainly miss the filing deadlines.
Italian-language commentary on Cassazione 7663/2026 has focused, reasonably enough, on the doctrinal point: one class suffices. What that commentary has not addressed in practical terms is what this means for a US credit team managing an Italian exposure from New York or Chicago.
The ruling does not make Italian restructurings more debtor-friendly in isolation. It makes them more debtor-friendly unless the dissenting creditor actively litigates the substantive tests. A passive "no" vote no longer protects you. What protects you is a forensic challenge to the attestor's valuation, a creditor-side liquidation analysis, and a fully argued opposition filed within the CCII's procedural windows.
US practitioners who have worked Chapter 11 cases will recognise the shape of this challenge. The difference is the toolkit. There is no 2004 examination equivalent under Italian procedure. There is no Rule 26 disclosure obligation. The attestor is not your expert witness. Getting to the evidence you need — the debtor's actual cash-flow model, the asset valuations, the intercompany transactions — requires a different procedural approach: access to the court-supervised file, targeted requests through the commissario giudiziale (the court-appointed supervisory officer), and in some cases parallel enforcement actions to preserve asset value pending homologation.
The cost of a properly resourced opposition in an Italian continuity concordato preventivo — meaning Italian counsel, a financial attestation adviser, and coordination with New York counsel on cross-border issues — should be budgeted in the range of €80,000 to €250,000 depending on the complexity of the debt stack and the number of contested issues, with the homologation proceeding running four to seven months from plan filing to first-instance judgment.
In our files, the most common error by foreign bank creditors in Italian restructurings is the assumption that a "no" vote freezes the process while their home-office legal team assesses options. It does not. The Italian procedure continues on its own timeline after the vote closes. By the time a New York credit committee has approved the litigation strategy, the thirty-day window for filing observations under Art. 48 CCII has often already passed. The second most common error is relying on the attestor's report as a neutral document: it is prepared for the debtor and filed by the debtor. Commission your own analysis before the vote closes, not after.
If my bank holds a majority of the total debt, can it still block an Italian cram-down?
Not automatically. After Cassazione 7663/2026, numerical weight in dissenting classes does not create a procedural veto. Your leverage lies in the substantive tests at the homologation hearing — particularly the best-interest and absolute-priority tests under Art. 112 CCII — and in challenging the composition of the consenting class if it was artificially constructed. The thirty-day observation window after plan filing is the critical deadline.
Does Italian cram-down apply to secured creditors?
Yes, with conditions. A secured creditor class can be crammed down provided the plan does not allocate to that class less than the liquidation value of its collateral, and provided no junior class receives value while the senior secured class remains unpaid in full. These are hard limits under Art. 112(1)(b) CCII. Challenging them requires a creditor-side valuation of the collateral presented to the homologation court within the procedural windows.
What is the difference between a continuity concordato preventivo and a liquidating concordato?
A continuity concordato preventivo (concordato in continuità aziendale) is a restructuring plan under which the debtor continues operating — either directly or through a sale of the business as a going concern to a third party. It is the only type of plan to which the forced-confirmation mechanism under Art. 112 CCII applies. A liquidating concordato (concordato liquidatorio) distributes the proceeds of asset sales without continuation of the business and operates under different confirmation rules: forced confirmation is not available, and all classes must be satisfied at the agreed percentages. If your Italian borrower is presenting a plan as continuity, verify that characterisation: the classification determines whether cram-down is on the table.
HREFLANG BLOCK:
Editorial Team — Panato Law Firm Staff
