"NEWS July 13, 2016-The (in) usefulness of expertise in merger with partnerships"

Posted by on Jul 13, 2016

In the context of corporate transactions involving partnerships that the company deserves a particular focus article 2501-sexies cod. CIV., imposing an obligation to prepare a report on the estimate of the company's assets of persons in accordance with article 2343.

The need for an expert opinion on the estimate of the company's assets of partnerships is set in a "clumsy" only in the penultimate paragraph of article 2501-sexies cod. CIV. (entitled "expert report"), immediately following paragraphs outlining the rights and responsibilities of experts appointed to draw up the appraisals for the purposes of the fairness of the proposed share exchange ratios.

In particular, in paragraph 7 of that article reads: "to the persons referred to in the third and fourth paragraphs shall also entrusted in case of merger of partnerships with corporations, the report on the estimate of the company's assets of persons in accordance with article 2343."

Based on the wording, shows how the report estimates it to be required in all cases in which it is involved, such as incorporating or incorporated, a partnership and in order not to harm the interests of the creditors of the acquiring company or merged.

Aside from technical aspects of legislation, but it is good to focus on the content of that provision in order to put in evidence the true extent under the corporate reorganization transactions.

It said the careful reading of the standard leads to fully share the view of the National Council of notaries in study # 204-2009/s, where he said "without fear of denials, that this policy is a prime example of how the legislature of reform is sometimes intervened so clumsy and sloppy."

He highlighted the Notariat as to fully understand the true extent of this provision is necessary to identify the purpose of the assessment to estimate request: "the function of that report, as it is known, is to ensure the integrity of social capital in relation to the assets provided by partnerships and this is because for partnerships, there is no strict discipline or control on values and on stakeouts contained in the statement". But, on closer examination, the need to ensure that effectiveness is apparent only in the event that the acquiring company should proceed to raise the capital to distribute shares to owners of incorporated, or in the event of merger of partnerships and capital companies, when the post-merger capital is determined by more than the capital already exposed by s.p.a. or s.r.l. participating in the merger ".

The conclusion is that the need for expertise on the estimate of the company's assets of persons incorporated in a corporation should emerge "in the sole event that the company's net assets of people is used to increase the capital of the acquiring company itself."

It stresses, however, that the possible adverse effect on the safeguard of social capital should be checked taking into account the effectiveness (or not) of values emerging from the budget of the acquiring company or of the company resulting from the merger and not emerging from the embedded statement values, which in fact is extinguished as a result of the merger process. This provided that, of course, there is no capital increase as a result of the merger process.

Less understandable is the affirmation of notaries in the aforementioned study, where shows that depending on the wording, the provision of article 2501-sexies, seventh paragraph, would involve also the simplified merger referred to in article 2505 cod. CIV.. This article contains an express derogation to that effect where, in the first paragraph, specifies that "the merger of one company by another which holds all the shares or the shares of the first shall not apply the provisions of article 2501-ter, subparagraph, nn. 3 4 5)), and art.) 2501-d and 2501-sexies ".

The consequence is that in the case of simplified merger all provisions referring to article 2501-sexies, including one that imposes the need for prediction expertise of partnerships, are not applicable in every case and irrespective of whether or not the compatibility considerations above represented.

The example of simplified merger seems emblematic of the futility of the prediction expertise in all cases where, as sometimes happens in this procedure, the operation may become exhausted in built-in cancellation capital with no increase of capital in merging company. In this case, it seems pretty obvious that the expertise of estimation of the assets of the partnership to be merged "couldn't find any justification".

A different view on this point is the Triveneto Committee of notaries regarding deeds (Max L.A. 7), according to which the relationship of esteem ex Article 2343 cod. CIV. is required:

  1. If the merged company is a corporation of the new Constitution;
  2. where the company resulting from the merger is a corporation that, as a result of the merger, increases shareholders ' equity. According to this view, even in cases where it is not applicable to merging the article 2501-sexies Civ. in the so-called simplified mergers, what is excluded is solely the necessity of having a single expert in charge of drafting the report on the share exchange ratio and the report on the estimate of the assets of the partnership, but also the need to proceed with the drafting of the latter relationship.

by Enrico Ferra