The Italian Supreme Court recently ruled on the applicability to the loan entered into for the acquisition of a business of the rules governing the contracts and debts of the business itself (Order 31313/2022). In the case at issue, a creditor filed a petition to be recognised as one of the creditors of the (bankrupt) transferee of a business in relation to a loan previously granted to the transferor in order for the latter to purchase the business itself.
Since such loan has been considered as not inherent to the operations of the transferred business, the Court ruled out the applicability of the civil law rules on business transfers, in particular of both Article 2558 of the Civil Code (which establishes that the business purchaser automatically steps into the seller’s position in pending business contracts not having a personal character) and Article 2560 of the Civil Code (which establishes the conditions for the post-transfer liability for debts inherent to the operations of the transferred business and prior to the transfer itself). The decision grounds on the consideration that the loan aimed at acquiring a business cannot be considered inherent to the business itself.
The ruling is relevant in the context of the negotiation of M&A transactions of Italian businesses, whose contracts, therefore, cannot provide for any liability whatsoever of the transferee for the debts incurred by the transferor for the acquisition of the business.