Legal set-off and bankruptcy: the Court of Cassation clarifies with ruling no. 14330/2025
When a company approaches insolvency, every payment decision made by the director is scrutinised by the trustee and, where applicable, by the Public Prosecutor. The Criminal Section V of the Court of Cassation, with ruling no. 14330 filed on 11 April 2025, provides a firm point: paying a debt already extinguished by legal set-off can constitute the crime of fraudulent bankruptcy of assets under art. 216, paragraph 1, of the bankruptcy law, with all the ensuing sanctionary consequences.
The Court's maxim
In the context of bankruptcy offences, since legal set-off between two debts operates automatically provided they coexist and are certain, liquid, and due, the director who pays a debt that, due to the automatic operation of legal set-off, has become non-existent commits the crime of fraudulent bankruptcy of assets. (In application of this principle, the Court quashed the contested judgment with referral, as it was necessary to ascertain that, at the time of payment, all the legally required conditions for the automatic operation of the aforementioned cause of extinction of the obligation were met).
The Supreme Court refers to art. 1241 et seq. of the Italian Civil Code: when two parties are simultaneously debtors and creditors to each other for sums that are certain, liquid, and due, the respective debts are extinguished ipso iure. Paying nonetheless means diverting resources from the bankruptcy estate, with evident prejudice to the company's creditors.
The core of the decision
The Court quashed the ruling of the Court of Appeal of Turin of 5 July 2024 with referral, in order to verify, on the facts, the existence of the objective conditions for set-off at the time of the payment ordered by G. P., former director of the bankrupt company. If these conditions were met, the payment would be considered a misappropriation and, therefore, fraudulent.
- Certainty: the credit must be undisputed;
- Liquidity: its amount must be determined;
- Due date: there must be no suspensive terms or conditions.
Only if the three requirements were met would the set-off have operated "automatically" pursuant to art. 1242 of the Italian Civil Code, rendering the payment without cause.
Links to previous case law
The principle is not isolated: rulings no. 37062/2022, 27446/2024, and 27132/2020 had already affirmed that the extinction of a debt, if ignored by a director in crisis, can have criminal relevance. The novelty of ruling 14330/2025 is the emphasis on the automatic nature of set-off: a formal contractual act is not required, the existence of the legal requirements is sufficient.
Operational implications for directors and professionals
Those managing a company in difficulty must:
- punctually verify every debit and credit position with counterparties who are simultaneously debtors;
- document any impossibility of set-off (e.g., disputed or not due credit);
- promptly seek the opinion of legal counsel or the auditor, especially after the entry into force of the Code of Crisis (Legislative Decree 14/2019) which strengthens monitoring obligations.
Ignoring set-off, in fact, can not only lead to criminal liability but also expose the director to civil liability actions under art. 2394 and 2497 of the Italian Civil Code, with claims for damages from the trustee and creditors.
Conclusions
Ruling 14330/2025 reaffirms a basic concept: the protection of bankruptcy creditors also involves rigor in recognising causes for automatic extinction of obligations. For the inattentive director, the line between legitimate management and fraudulent bankruptcy is thin and, as the Court of Cassation reminds us, is measured by adherence to the civil law principles of set-off.
