Minor Composition and Expense Fund: Cassation 17721/2025 Rewrites Inadmissibility Rules

The Business Crisis Code (CCII) introduced the minor composition for professionals and small businesses in difficulty, aiming for continuity. Ruling No. 17721 of June 30, 2025, by the Court of Cassation, presided over by Dr. F. M. and reported by Dr. V. P., clarifies the consequences of non-compliance with the obligation to deposit an expense fund for the judicial commissioner. A crucial decision that prioritizes substance over form.

The Expense Fund in Minor Composition: Obstacle or Parameter?

Minor composition (Articles 74 et seq. CCII) is a simplified restructuring procedure. The judicial commissioner, appointed to replace the OCC, oversees the plan and incurs costs. Article 78, paragraph 2-bis, CCII, allows the judge to request an expense fund. The question is whether its failure to be established can automatically render the procedure inadmissible.

Ruling 17721/2025: The Cassation's Principle

The Court of Palermo (December 18, 2023) had declared a request for minor composition inadmissible, presumably due to the failure to establish the fund. The Court of Cassation, with the ruling analyzed here, has provided a more flexible and substantive interpretation. Here is the maxim:

In matters of minor composition, specifically with the continuation of professional activity, in the case of the appointment of a judicial commissioner to replace the OCC, pursuant to Article 78, paragraph 2-bis, of the c.c.i.i., the judge may prescribe the debtor to deposit an expense fund, without its non-compliance (or failure to observe the assigned deadline, even if qualified as peremptory) constituting in itself a cause for inadmissibility or impropriety of the application, with automatic revocation of the decree opening the procedure, reserving the possibility for the judge to assess, also from such conduct, the eventual lack of feasibility of the plan in light of the foreseeable costs of the procedure indicated in the detailed report of the OCC pursuant to Article 76, paragraph 2, letter e), of the c.c.i.i.

The Court of Cassation clarifies that the failure to establish the expense fund, even with a peremptory deadline, does not lead to automatic inadmissibility or revocation. The focus shifts from formal compliance to an overall assessment of the plan's feasibility. Non-compliance is an element that the judge considers in analyzing the debtor's ability to bear the costs, as indicated in the OCC's report (Article 76, paragraph 2, letter e), CCII). Not a definitive block, but a signal for an in-depth investigation into the economic sustainability of the project.

Practical Implications: Towards a Merits-Based Assessment

• For the Debtor: Greater flexibility. Temporary difficulties in payment do not automatically preclude composition. Demonstrating the economic sustainability of the plan remains crucial.
• For the Judge: Requires a merits-based analysis, evaluating the debtor's conduct in relation to costs and the overall feasibility of the plan.

The Court emphasizes the balance between procedural requirements and the objective of restructuring and continuity (Article 47 CCII).

Conclusions: Substance Prevails Over Form

Ruling No. 17721 of 2025 reinforces an interpretation of the Business Crisis Code oriented towards favoring the resolution of crises. It clarifies that the failure to establish the expense fund is not a cause for automatic inadmissibility, but an element to be weighed in assessing the plan's feasibility. An approach that prioritizes substance over form, offering debtors a concrete opportunity for recovery, provided their project is genuinely achievable and sustainable.