Unlimited liability of the liquidator to dissatisfied creditors for violation of the par condicio creditorum

The Third Civil Chamber of the Supreme Court, by order no. 11304 of 12 June 2020, ruled on the ‘unlimited’ liability of the liquidator towards the company’s creditors who were dissatisfied if the principle of par condicio creditorum was violated.

Where, following the cancellation of the company (pursuant to art. 2495, paragraph II, of the Italian Civil Code), the liquidator has canceled the assets, thus making it impossible to satisfy a claim not included in the final balance sheet, it is possible to find an ‘unlimited’ liability of the liquidator towards the unsatisfied creditor, holder of a social claim. In the present case, in fact, it emerged that the liquidator having become aware – during the liquidation phase – of the claim of a privileged nature, had nevertheless made payment of other social debts, in violation of the principle of par condicio creditorum and leaving the privileged creditor unsatisfied.

Since it is a matter of non-payment of a social debt referable to the activity carried out by the liquidator in the exercise of his duties, the Supreme Court, which Article 2495, paragraph II, Civil Code specifically outlines the responsibility of the shareholders and the liquidator, then defines that the burden of proving the violation of the principle of par condicio creditorum, which caused him the unjust damage, falls on the creditor himself.

The substantial difference between the liability of the shareholders and the liability of the liquidator after the cancellation of the company lies in the fact that, for the former, it is a liability ‘limited’ to the possible allocation of assets in their favour; on the contrary, the liability of the liquidator is ‘unlimited’, since it does not take into account the possible existence of a residual asset to be allocated among the shareholders, or the entry in the balance sheet of the unpaid debt, but rather the fault for not having fulfilled its obligation to proceed with an orderly liquidation of the company’s assets, through a correct and faithful recognition of the company’s debts. In this case, it is the creditor’s responsibility to deduct and attach the specific conduct of the liquidator who has breached these obligations.

In conclusion, the Judges of Legitimacy ruled on the following principle of law: “on the subject of the liquidator’s liability towards the company’s creditors who were dissatisfied after the cancellation of the company, pursuant to art. 2495, paragraph 2, of the Italian Civil Code, the achievement, in the final liquidation balance sheet, of a reduction to zero of the assets not capable of satisfying a claim that was not included in the final liquidation balance sheet, but in any case proven to exist already in the liquidation phase, is a source of unlimited liability of the liquidator towards the pre-existing creditor, if it is attached and proven that the management carried out by the liquidator shows the execution of payments in defiance of the principle of equal creditor status, in violation of the legitimate causes of pre-emption pursuant to Article 2741, paragraph 2, of the Italian Civil Code. Therefore, where the assets have proved to be insufficient to satisfy some of the company’s creditors, the liquidator, in order to free himself from the responsibility incumbent on him with reference to the duty to carry out an orderly liquidation of the company’s assets intended for the payment of the company’s debts, has the burden of attaching and proving that the intervening zeroing of the assets through the payment of the company’s debts does not refer to conduct taken to the detriment of the individual creditor’s right to receive equal treatment with respect to other creditors, except for the legitimate causes of pre-emption pursuant to Article 2741 of the Italian Civil Code“.

Attached, the Ordinance of the Court of Cassation (in Italian).