First of all we can describe pre-emption right as the right of existing shareholders in a company to buy shares offered for sale before they are offered to the public.
Secondly we can describe “under bankruptcy law” as the period in which a company is surveilled by the Judge due to the risk of insolvency,
LLC Companies in Italy are governed by a specific Company bylaws which provides the shareholders rights, such as the pre-emption right in case of selling by other shareholder.
Usually such right can be exercised under certain conditions, there in indicated, such as time, price, and others details to be sent to the company and to others shareholders, within a number of days before the act. So such rights, as defined above, does not apply if the company is still under the composition with creditors or under bankruptcy law. In such cases will be applicable a special procedure, pursuant by Italian civil code article n. 2471 as referred by article n. 106 of Bankruptcy law. And in fact the aforementioned article provides that:
The participation can be subject to expropriation. The attachment is carried out by notification to the debtor and the company and subsequent registration in the register of companies.
The order of the judge ordering the sale of the shareholding must be notified to the company by the creditor.
If the shareholding is not freely transferable and the creditor, the debtor and the company do not agree on the sale of the share, the sale takes place at the auction; but the sale is ineffective if, within ten days of the award, the company presents another buyer offering the same price.
The provisions of the preceding paragraph also apply in the event of the bankruptcy of a shareholder.
In the mechanism above mentioned described, the right to vote belongs to the debtor shareholder up to the moment of the sale of the share.
First Refusal Right or Pre-emptive Righ?"First refusal's right", the right of first refusal, is often used to identify those situations in which one of the contractors guarantees to the other that they prefer it to any third party in the stipulation of a specific contracts. When the pre-emption regards the sale of shares in a limited liability company it is more correct to use the term "pre-emptive right" instead of the generic right of first refusal.
And for the pre-emption in favour of the other shareholders provided for by the Company's bylaws?
First Refusal Right or Pre-emptive Right?
"First refusal's right", the right of first refusal, is often used to identify those situations in which one of the contractors guarantees to the other that they prefer it to any third party in the stipulation of a specific contracts.
When the pre-emption regards the sale of shares in a limited liability company it is more correct to use the term "pre-emptive right" instead of the generic right of first refusal.
And for the pre-emption in favour of the other shareholders provided for by the Company's bylaws?
It was pointed out that these mechanisms work as well for pre-emptive clauses as for approval clauses.
Therefore, the mechanism to be followed will not ones provided by the company bylaws but the legal one provided pursuant to article n. 2471 of the Italian civil code.
The described mandatory mechanism has been set up for the protection of the company and their shareholders.
The above mentioned mechanisms are important to avoid making mandatory the provisions of the company's by-laws if the provisions of the law are automatically applicable.