Simple Bankruptcy for Excessive Expenses: Conditions for the General Partner (Cassation 27245/2025)

The management of a business, especially during times of crisis, requires scrupulous attention to the rules governing assets and individual responsibilities. A crucial aspect of bankruptcy law is simple bankruptcy due to excessive personal expenses, the application of which to the general partner of a Limited Partnership (SAS) has been recently clarified by the Court of Cassation. Ruling No. 27245 of July 24, 2025, offers valuable guidance, precisely outlining the prerequisites for this offense to be established. Let's delve into the principles set forth by the Supreme Court.

Simple Bankruptcy and the Position of the General Partner

Simple bankruptcy, governed by Article 217 of the Bankruptcy Law (now Article 323 of the Code of Business Crisis and Insolvency), punishes imprudent or negligent conduct by the entrepreneur that exacerbates insolvency. Among these, "excessive personal or family expenses" stand out, meaning those disproportionate to the agent's economic condition. In the context of an SAS, the general partner holds a specific position, being unlimitedly and jointly liable for the company's obligations (Art. 2313 of the Civil Code). This extended liability raises questions about their criminal responsibility in case of the company's bankruptcy.

In matters of bankruptcy offenses, the offense of simple bankruptcy for excessive personal expenses, meaning disproportionate to the agent's economic condition, can be applied to the general partner of a limited partnership only if they have been personally declared bankrupt and the personal expenditures were made with their own resources.

The ruling of the Cassation, contained in Ruling 27245/2025 (President G. R. A. M., Rapporteur E. P.), is illuminating. Rejecting the appeal of the defendant C. B., the Court reiterated that simple bankruptcy for excessive expenses does not automatically apply to the general partner of a bankrupt company. Two essential conditions are necessary, clearly defining the scope of the offense and avoiding confusion with more serious offenses such as fraudulent bankruptcy.

The Two Conditions for Attributing the Offense

The Supreme Court has established precise criteria for applying simple bankruptcy to the general partner:

• Personal Bankruptcy of the Partner: It is essential that the general partner has been personally declared bankrupt. The extension of the company's bankruptcy to the unlimitedly liable partner (ex Art. 147 Bankruptcy Law, now Art. 256 Code of Crisis) is the legal prerequisite for contesting conduct related to their assets. Without personal bankruptcy, there is no basis for applying this specific offense.
• Use of Own Resources: The excessive personal expenses must have been incurred using the partner's personal assets, not the company's resources. If the sums had been withdrawn from the company's assets, it would constitute the far more serious fraudulent bankruptcy for misappropriation (Art. 216 Bankruptcy Law, now Art. 322 Code of Crisis), which requires specific intent to defraud creditors. Simple bankruptcy, conversely, focuses on the imprudent management of one's personal assets in a context of crisis.

These conditions are crucial for ensuring a correct distinction between different types of bankruptcy and for applying criminal law proportionally to the conduct.

Conclusions and Final Reflections

Ruling 27245/2025 by the Court of Cassation consolidates the jurisprudential trend regarding simple bankruptcy for excessive personal expenses, providing a more defined legal framework for general partners. The necessity of the partner's personal bankruptcy and the use of their own resources for excessive expenses serves as a safeguard for the correct application of criminal law. This decision underscores the importance of rigorous and transparent asset management, both at the corporate and personal level, with the aim of preventing insolvency and protecting creditors. For entrepreneurs and professionals, knowledge of these principles is fundamental to navigating the complex landscape of Italian bankruptcy law with awareness.