Fraudulent Bankruptcy: The Court of Cassation (Judgment no. 24692/2025) Clarifies the Psychological Element

Fraudulent bankruptcy, a serious and debated crime in corporate criminal law, always places the issue of the psychological element at its core. The recent Judgment no. 24692 of 17/06/2025 (filed on 04/07/2025) by the Court of Cassation offers essential clarification, precisely outlining the scope of criminal liability for directors.

The Fifth Criminal Section, presided over by Dr. M. G. R. A. and with Dr. M. E. M. as rapporteur, examined the case of the defendant B. P., rejecting the appeal against the decision of the Court of Appeal of Milan of 02/10/2024 and providing crucial guidance on the subjective element of fraudulent bankruptcy due to fraudulent transactions.

The Psychological Element in Fraudulent Bankruptcy: The Court of Cassation's Stance

Fraudulent bankruptcy, primarily governed by Article 216 of the Bankruptcy Law (Royal Decree no. 267/1942) and, for fraudulent transactions, by Article 223, paragraph 2, number 2 of the same law, punishes conduct carried out by the entrepreneur or directors that has caused or aggravated the company's insolvency with the intent to prejudice creditors. The real challenge for investigative and judicial bodies often lies in proving "intent," i.e., the criminal intention of the perpetrator.

The Supreme Court, with the judgment under review, has reiterated and strengthened a fundamental principle in this matter, clarifying the essential aspects to be proven to establish the psychological element in the crime of fraudulent bankruptcy due to fraudulent transactions. The maxim emerging from this ruling is particularly illuminating:

In the context of fraudulent bankruptcy due to fraudulent transactions, for the integration of the psychological element, it is necessary that the perpetrator acted with the awareness and will of the complex action causing financial prejudice in its naturalistic elements and in its conflict with the duties connected to the office, and that the concrete foreseeability of insolvency as an effect of the unlawful action exists, whereas the representation and will of the bankruptcy event are not necessary.

This passage is crucial. The Court of Cassation distinguishes between the will to perform the prejudicial action and the will to cause the bankruptcy event. For a conviction, it is not necessary to prove that the director intended bankruptcy or foresaw it as certain. It is sufficient to prove that the perpetrator carried out an action with full awareness and will to cause financial prejudice to the company, in conflict with their duties, and that insolvency was concretely foreseeable as a result of such conduct.

In other words, a director who engages in harmful transactions, even without desiring the bankruptcy of their company, risks fraudulent bankruptcy if they could foresee that those actions could lead the business to collapse. The focus, therefore, shifts from the ultimate intention to cause bankruptcy to the foreseeability of the consequences of one's prejudicial actions, attributable to a general intent regarding the action and a qualified awareness of the potential consequence.

Practical Implications for Entrepreneurs and Directors

This jurisprudential interpretation has significant repercussions for all those holding management and administrative roles within companies. Judgment no. 24692/2025 underscores the importance of business management characterized by the utmost diligence and transparency. Here are some key points:

• Awareness of one's actions: Every operational decision must be made with full understanding of its potential repercussions on the company's assets.
• Respect for duties: Directors must always act in the company's interest, avoiding conduct that may violate the fiduciary duties connected to their office.
• Assessment of insolvency foreseeability: Constant risk analysis is fundamental. If a transaction, even if not aimed at causing bankruptcy, presents a high probability of leading to insolvency, it may expose the director to criminal liability if carried out with intent regarding the action and awareness of the risk.
• Distinction from specific intent to go bankrupt: The Court confirms that it is not necessary to prove a specific intent to go bankrupt, but rather an intent regarding prejudicial actions and the foreseeability of bankruptcy consequences.

Aligning with previous precedents (Judgments no. 17690/2010 and no. 38728/2014), this ruling strengthens the protection of creditors and the economic system, holding directors accountable whose conduct can compromise the financial stability of businesses.

Conclusions

Judgment no. 24692 of 2025 by the Court of Cassation represents an important warning for the business world. The psychological element in fraudulent bankruptcy due to fraudulent transactions does not require proof of a direct intention to cause bankruptcy, but focuses on the awareness and will of the prejudicial action and the foreseeability of insolvency as its consequence. This distinction is crucial and imposes a high level of attention and diligence on entrepreneurs and directors in managing company affairs. Preventive legal advice thus becomes an indispensable tool in this scenario for navigating the complexities of bankruptcy law and preventing criminal risks, ensuring that every decision is not only economically advantageous but also legally impeccable.