The quantification of damages resulting from the illegitimate continuation of business activities (Art. 2486 of the Italian Civil Code)

1. Introduction and regulatory framework

Art. 2486 of the Italian Civil Code, permanently integrated into the organic framework of the Code of Business Crisis and Insolvency (Legislative Decree no. 14/2019), governs the scope of civil liability for directors and, as a consequence of supervisory duties (culpa in vigilando pursuant to art. 2407 of the Italian Civil Code), for the members of the board of statutory auditors during the stages following the occurrence of a cause for dissolution of the company. Upon the change in the company's condition – typically identifiable as the total loss or reduction of share capital below the legal limit pursuant to art. 2484, first paragraph, no. 4 of the Italian Civil Code – the management powers of the directors undergo a binding contraction: from a dynamic management oriented toward business risk and profit, it is converted into an obligation to act solely for the purposes of preserving the integrity and value of the corporate assets.

The Research Document of the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) published on March 24, 2026, addresses the methodological complexities related to the technical measurement of compensable damages, formalizing the two presumptive criteria introduced by Art. 378 of the CCII:

• The equity value difference criterion (primary criterion): recoverable damages are presumed to be equal to the difference between the net equity determined as of the date the director ceased to hold office (or as of the date the insolvency proceedings were opened) and the net equity determined as of the date the cause for dissolution occurred, after deducting costs incurred and to be incurred according to a criterion of normality.
• The insolvency deficit criterion (subsidiary and residual criterion): In cases where insolvency proceedings have been initiated and accounting records are missing, or where net equity cannot be determined due to the irregularity of such records or for other reasons, damages shall be liquidated in an amount equal to the difference between the assets and liabilities established within the proceedings themselves.

2. The accounting and management factors that generate and conceal the crisis

In the study of corporate dynamics, a business crisis is rarely configured as an exogenous and instantaneous event; it almost always represents the final outcome of progressive economic and financial degenerations. In cases of management liability, the adoption of pathological accounting policies aimed at concealing insolvency or the loss of going concern assumes critical relevance, artificially delaying the date on which negative equity emerges (time T1). The forensic activities of the Liquidator or the Court-Appointed Expert (CTU) must be directed toward a precise examination of specific areas of reporting and accounting risk.

A. Overstatements of Assets

Improper monetary revaluations of real estate (OIC 16): The revaluations of tangible fixed assets permitted by special laws are legitimate exclusively within the limit of the value in use or market value of the asset, determined through objective appraisals. The adoption of revaluations lacking economic substance, for the sole purpose of artificially reconstituting net equity eroded by prolonged losses, constitutes a fraudulent concealment of the state of dissolution.

Inappropriate capitalization of multi-year costs (OIC 24): The recognition of development costs and start-up expenses as assets requires the identifiability of projects, their technical feasibility, and reasonable certainty of economic recovery through future revenues. In contexts of latent crisis, the generic capitalization of personnel costs or current expenses represents an elusive expedient. The negative trend of the statutory operating differential in the Income Statement (A-B) is symptomatic of the revenues' inability to remunerate production costs, refuting the optimistic projections of corporate business plans.

Failure to write down trade receivables (OIC 15): Receivables must be consistently recorded at their estimated realizable value. The failure to write down non-performing, impaired, or insolvent debtor positions — through the allocation of a clearly inadequate allowance for doubtful accounts — is the most common accounting instrument used to defer the recognition of operating losses and conceal a crisis involving the erosion of capital.

Overvaluation of inventories (OIC 13): The valuation of inventory at purchase or production cost, in defiance of the principle of prudence which requires the adoption of the lower of cost or net realizable value derived from the market, distorts the economic results. The failure to write down obsolete or slow-moving inventory fictitiously inflates current assets.

Incorrect accounting for work in progress on order (OIC 23): The recognition as revenue of claims for additional compensation (construction reserves) submitted by the contractor requires, in accordance with the principle of prudence, reasonable certainty or formal acceptance by the client before the balance sheet closing date. The recording of receivables and revenues not supported by objective evidence distorts intermediate balances, concealing a capital deficit.

B. Understatement or Concealment of Liabilities

Failure to record tax and social security liabilities (OIC 25): Compliance with the principle of accrual accounting dictates the recognition of current taxes (IRES, IRAP, VAT) and withholdings in the financial year in which they accrue, prohibiting the use of the cash basis. The systematic understatement of tax liabilities, combined with the failure to record on an accrual basis the penalties and interest accrued on notices of irregularity or unpaid tax bills, radically alerts the true and fair view of the company's financial position.

Improper use of the Restructuring Fund (OIC 19): The omitted or arbitrary recognition and utilization of provisions for risks and charges (related to reorganization plans or acquired business units) is sometimes used as a discretionary lever to release positive components to the Income Statement, fictitiously sterilizing current operating costs.

C. Changes in Shareholders' Equity and Prejudicial Transactions

Reclassification of shareholder loans (OIC 28): The recognition in item A.VII of Equity ("Other reserves") of sums paid by shareholders requires the unequivocal requirement of non-repayability. Should the payments be potentially repayable, they constitute actual liabilities to be recorded under "Payables to shareholders for loans". Their allocation to equity improperly masks a state of capital deficit.

Preferential payments: In phases of irreversible crisis and in the absence of business continuity, making selective payments to unsecured creditors (often related parties or personal strategic suppliers), to the detriment of preferential or secured creditors, constitutes a prejudicial act against the corporate assets, capable of grounding a claim for damages by the Curatore for breach of the par condicio creditorum.

3. Application dynamics of the Net Assets Method

The determination of compensable damages through the presumptive criterion of the difference in net equity (Art. 2486, third paragraph, of the Italian Civil Code) requires the technical consultant to adopt rigorous methodological corrections aimed at isolating the material causation link:

1. Consistency of valuation criteria: It is methodologically incorrect and economically distorting to determine the net equity at time T1 (date of dissolution) using going concern criteria and the net equity at time T2 (commencement of insolvency proceedings) using liquidation criteria. Both equity values must be estimated using the same criteria to prevent the compensable difference from being affected by mere valuation adjustments unrelated to actual mismanagement (mala gestio).
2. Sterilization of physiological time: The difference in net assets must be adjusted for losses related to the time strictly necessary for the administrative structure to prepare interim financial statements, formally ascertain the cause of dissolution, and initiate the liquidation or insolvency proceedings. Barring culpable delays, such physiological losses are not attributable to the corporate bodies.
3. Exclusion of extraordinary items: Liabilities arising from remote events occurring prior to T1 (e.g., final judicial rulings concerning previous litigation) must be reversed from the calculation of damages, as well as extraordinary positive components emerging between T1 and T2 that do not represent new wealth generated by the continued operation of the business, but rather the mere accounting recognition of latent capital gains (e.g., from business contributions).

4. The Insolvency Deficit Criterion and the interpretation of "Other Reasons"

The criterion of the insolvency deficit (the difference between assets and liabilities verified in the proceedings) constitutes a subsidiary and residual liquidation method, the application of which is strictly contingent upon demonstrating the objective impossibility of determining the net equity values.

5. The civil liability of Statutory Auditors in light of Law No. 35/2025

In compliance with the provisions of Art. 2407, second paragraph, of the Italian Civil Code (c.c.), the members of the board of statutory auditors are solidarily liable with the directors for damages caused by the unlawful continuation of business activities, provided that such losses would not have occurred had the supervisory body fulfilled its duties of oversight with the required professional diligence, by timely exercising the reactive and substitutional powers granted by the legal system.

With the entry into force of Law no. 35/2025 (effective from 12 April 2025), the legislator has introduced a profound reform of the indemnity system, establishing a quantitative limit (cap) on the civil liability of statutory auditors for failure to supervise, applicable outside of cases involving willful misconduct. The total compensation is calculated based on the annual remuneration received according to the following binding brackets:

• For annual fees up to 10,000 euros: maximum liability limited to fifteen times the fee.
• For annual fees ranging from 10,000 to 50,000 euros: maximum liability limited to twelve times the fee.
• For annual fees exceeding 50,000 euros: maximum liability limited to ten times the fee.

The regulation also introduces a specific five-year statute of limitations, running from the filing of the audit report on the financial statements of the fiscal year in which the damage occurred. Regarding transitional law, the Corte di Cassazione (judgment no. 1390 of 22 January 2026), applying Art. 11 of the Preleggi, established the principle of non-retroactivity of the reform, confirming that the regime of fee multiples does not apply to material facts occurring prior to the entry into force of Law no. 35/2025.