Abstract

The Italian corporate bankruptcy law has long been found to suffer from indirect and direct costs, being biased towards liquidation and having usually resulted into very lengthy procedures. This paper seeks to outline the principles which might imbue the reform of the Italian bankruptcy regime. To accomplish this aim, first the economic debate on the efficiency of bankruptcy procedures is reviewed; secondly, the UK and the US legislations are briefly analysed as contrasting examples of creditors protection; finally, the major weaknesses of the Italian law and the empirical evidence on its direct costs are discussed.