The Perini Navi insolvency explained
Exploring Perini Navi’s insolvency to date and considering the next steps for the yard, its creditors and its owners…
On 29 January 2021, judges at the Lucca Tribunal determined that Perini Navi had entered bankruptcy. What has followed since is a series of back and forth announcements that amount to the expressed interest of various acquisition parties, a challenge to the insolvency proceedings, the discovery of new investors and confirmation that Perini Navi has, in fact, been determined bankrupt. Herein we explore the process so far and consider what the next steps are likely to be for the Italian superyacht manufacturer, its creditors and the owners with stalled projects.
In May 2020, Perini Navi filed an application to the court of Lucca to be admitted to Concordato Preventivo (insolvency proceedings), after which Perini Navi was provided a determined period to propose a settlement with the business’ creditors or, otherwise, file a plan for the restructuring of the business. On 29 January 2021 it was revealed that, while Perini Navi had announced that it had secured new investment in the form of the Blue Skye Investment Group, the only document presented to the presiding judges was a letter requesting an extension in providing the relevant authorities with the settlement or restructuring plans. The Lucca Tribunal, therefore, denied the extension and declared the business bankrupt.
Once Perini Navi’s bankruptcy had been announced several parties expressed their interest in the acquisition of Perini Navi’s various assets. Most notably Sanlorenzo and Ferretti Group announced the creation of NewCo, a joint venture to purchase Perini Navi’s assets. NewCo was joined by The Italian Sea Group and Palmubo Superyachts in expressing interest in acquiring the brand and its facilities.
However, it was subsequently announced that Fenix (the Tabacchi family), the controlling shareholder in Perini Navi, had launched a challenge to the insolvency proceedings, adding on 27 April that Fenix had arranged new investors in the form of private equity firm Clessidra and another unnamed partner. However, the attempt to challenge the insolvency proceedings failed in its entirety.
“Fenix filed a challenge to the insolvency verdict, which is allowed under Italian law,” states a source close to the shipyard. “They put forward reasons that were both legal, which considered the validity of the legal reasoning behind the insolvency, as well as reasons based on merits and the rationality of declaring the business bankrupt. The court of appeal in Florence, however, after listening to the lawyers from all parties, issued a decision that rejected, in their entirety, the arguments put forward by Fenix. All the arguments were rejected and the court has confirmed the lawfulness and necessity of declaring the insolvency and bankruptcy of Perini Navi.”
Firstly, it should be noted that the Tabacchi family still has the opportunity to file a further opposition to the courts. There is, within Italian law, a third degree of judgement that is available to an insolvent business. Whether or not this will be actioned remains to be seen. However, for the time being, the bankruptcy proceedings are in place, meaning the management of Perini Navi is now in the hands of the receiver and under the supervision of the courts.
The purpose of the receiver at this juncture is twofold. Firstly, the receiver needs to determine what the liabilities of Perini Navi are. In this respect, there is a hearing due in June 2021, before which creditors must file an application to the court in which they indicate the extent of their credit with Perini Navi and the grounds for said credit. Upon receipt from the creditors, an executive statement of liabilities will be rendered in order to officially acknowledge the monies owed by Perini Navi.
At the same time, the receiver will be determining the value of Perini Navi’s assets with a mind to liquidating the assets either wholesale or in parts depending on which option presents its self as being the most economically viable for Perini Navi’s various creditors.
Where shipyards are concerned, however, the debtor/creditor perspective is only one side of the coin. In conjunction, one must consider the options available to the owner’s with whom Perini Navi has ongoing build contracts, either new build or refit.
“The bankruptcy law provides that, regarding contracts of construction and refit, the receiver will terminate these contracts, unless, with approval of the courts, it is determined that it is in the interest of all parties to continue the contracts,” continues the source. “If the contracts are terminated, which is the likely outcome, the owners will negotiate the delivery of the projects in their unfinished state with the receiver with a mind to moving them to an alternative shipyard for completion. There are other options available to owners that relate to reimbursement and indemnity, which will be subject to the conclusion of potential disputes, but these options are unlikely to be taken by owners due to the cross-jurisdiction legal complexity and cost that will likely arise.”
While Fenix may yet to choose to act on the third layer of legal challenge, it seems likely at this point that the Perini Navi brand and its assets will be sold off. With the number of interested parties that joined the fray after the original bankruptcy announcement it certainly appears that there will be no shortage of businesses interested in purchasing Perini Navi.
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