Barry Cahir
President of
INSOL Europe

As the final panel on the Friday afternoon of the Dubrovnik Annual Congress, the Anti-Fraud Forum had the pleasure of enlightening the crowd with its views on cybersecurity and, more specifically, the danger of cyberattacks.

Co-Chairs Carmel King (Grant Thornton, UK) and Bart Heynickx (Altius, Belgium) had requested Vijay Rathour, a partner in Grant Thornton’s forensic and investigations practice (UK), and the lead in its digital forensics group, to share his views.

The panel explained that law firms are often under attack, as they hold interesting client data, and also because changing details in contracts (such as payment information or bank accounts numbers) might result in payments not reaching the intended beneficiary but rather the fraudster. The outcome of such attacks is not always easy to predict. The criminals in question are hard to find and often hide in countries that are not easily accessible. Investigations need close, international cooperation based on common regulations. Such a framework is not always fully present.

Ransomware was also discussed. If a payment is made to cybercriminals, then there is no certainty that these criminals will (i) release the data to the company in question, (ii) not use the data for their own benefit or still sell it, and/or (iii) not attack the same victim again. Cases of “triple dipping” are known in which victims that have paid-off the fraudsters are easy pickings for the latter again and are thus likely to be attacked once more… 

The panel thus revealed that we, once again, live in a terrifying world and that remedies are scarce. Vijay came up with the (not so socially acceptable) advice to “trust no-one”. Clearly, an organisation is only as strong as its weakest (cyber)link. 

Visit the Anti-Fraud Forum's page on our website for the full report.

​​Nicola Martinelli from Studio Corno Avvocati in Italy has summarized the recent statistics focusing on Bankruptcy proceedings, non-bankruptcy insolvency procedures and voluntary liquidation procedures.

Further statistics from Italy can be found on our website and from all jurisdictions on our website here.

Bankruptcy Proceedings: With 2,000 proceedings opened from January to March 2022, bankruptcies proceedings show not only a strong contraction on an annual basis (-21.6% vs 1q 2021) but also one of the lowest levels since 2010. Compared to pre-Covid levels the bankruptcies proceedings decrease of 29,8%. In the first quarter of 2022 bankruptcy proceedings opened in all the main sectors show a decrease: services (-22,4%), construction (-15,4%) and industry (-27%). Such decreases are more significant if compared to pre-Covid levels. Corporations – with 1,514 procedures opened in the first quarter of 2022 – show a year on year decrease of 23.3%, with values far from 2019 (-31,7%). Also partnerships continue to show a decline (-7.7% vs 1q 2021 and -36.7% vs 1q 2019). A reduction in proceedings concerning individual companies has been registered, with 186 procedures opened (-19.5%).
 
Non-bankruptcy Insolvency Procedures: In the first quarter of 2022 there was a significant reduction in non-bankruptcy insolvency procedures (-53.5% vs 1q 2021). Among the non-bankruptcy procedures opened in the first quarter, composition agreements are confirmed as the most numerous (69), followed by compulsory administrative liquidations (35). Construction field records the most significant reduction (-72,2), while Industry decreases by 56.1% and service companies by 44.1%. Compared to pre-Covid levels all the sectors recorded lower numbers.
 
Voluntary Liquidation Procedures: From January to March 2022, 13,553 companies opened a voluntary liquidation procedure. Such procedures reduce if compared to the same period of the previous year (-2.6%) and, if compared to pre-Covid levels, a significant reduction (-20.3%). Reduction of 2.6% is mainly caused by voluntary liquidation procedures opened by corporations (-7.8%, 5,672 procedures), only partially compensated by the increase of procedures respectively concerning partnerships (+4.9%) and companies with no balance sheet (+1.6%). Voluntary liquidations are decreasing in the most relevant sectors. With 722 procedures, construction field registered the highest decrease (-11.8%); followed by industry (-1.5%) and services (-8.3%). Compared to pre-Covid levels all the sectors recorded lower numbers.

In Poland, the pre-packaged sale, also called the pre-pack administration, has been possible since 2016, as a result of important amendments to Bankruptcy Law and Restructuring Law – introduced via the Act of 15 May 2015. The pre-pack has grown in popularity, though some pitfalls occurred when two important cases were brought to the Court of Justice of the European Union (CJEU), namely Smallsteps (also known as Estro) (C-126/16) and Plessers (C-509/17) cases.

As a consequence of the first case especially, Estro or Smallsteps, the opinion of Polish government was that this required amendments to the Bankruptcy Law provisions regulating pre-packs. Within the legislative process, numerous experts contested this need and presented opinions proving that amendments are not required and they may make the Polish pre-pack less popular for the business. Indeed, after the amendments – introducing direct application of the Article 23[1] of the Polish Labour Code to a bankruptcy sale – the popularity of pre-packs went significantly down, with an estimated decrease of perhaps half of projects.

Read the full article by Mateusz Kalinski (Tatara and Partners, Poland) and previous INSIDE Stories on our website here.

We are pleased to announce that plans are well under way for the return of our EECC Conference, to be held in Vilnius, Lithuania, on 19 May 2023. An optional drinks reception will be held on the eve of the conference to welcome the delegates to the beautiful city. Look out for more details coming soon on our website.