The Absolute Priority Rule and the Distribution of Value in Corporate Reorganisations: The Italian Perspective

This article explores the application of the absolute priority rule (APR) and the possible deviations therefrom in the Italian system of corporate reorganisations. By means of a comparative analysis with reference to the US and German systems (also taking into account the Directive on preventive restructuring frameworks), the article examines the main theories elaborated thus far with regard to the relationship between self-regulation and public regulation. The conclusion is that none of the theories elaborated so far seems to lead to satisfactory results. Proposals are made for a different approach, which appears to be more effective at balancing the various interests related to the distribution of the value generated in corporate reorganisations. This approach complies in principle with the APR, but at the same time allows certain exceptions when justified in specific circumstances, under the supervision of the court (public regulation).