When the luxury fashion brand La Perla entered insolvency, it was clear this would not be a typical liquidation process. The business was split across two countries. Intellectual property and corporate control sat in the UK, while manufacturing, day-to-day operations and the majority of employees were in Italy.
While it is common for large brands to have a presence in multiple countries, the La Perla situation created immediate complexity. After the UK left the EU in 2020, the framework that once allowed insolvencies to flow across borders had disappeared. As a result, authority was unclear, control was divided, and decisions could not be taken in one place.
Quantuma, as the Joint Liquidators of La Perla’s UK entity, had a challenge on its hands. In this series of four articles, we will explain how we overcame it. Let us start by explaining the issues in more detail.
Competing proceedings
Due to ongoing financial issues and a £2.8m unpaid tax bill, La Perla entered liquidation in the UK and Italy at the same time. That created immediate conflict. UK and Italian courts could both assert jurisdiction, with each able to appoint its own officeholders. Since Brexit, there was no built-in mechanism to decide which process should lead.
The Italian side took a firm position. Due to the brand's heritage - and the fact that the majority of La Perla’s workforce is based in Bologna - the Italian courts independently assessed jurisdiction and argued that the company’s centre of main interests lay in Italy, not the UK. The result was parallel primary proceedings with no coordination or alignment. The insolvency also attracted the attention of the Ministry of Industry and Made in Italy from an early stage which exerted some form of control over the entire process.
Brexit meant that all parties were in uncharted territory. Before it, insolvency proceedings were recognised automatically across the EU. But now that the system no longer applied, recognition had to be sought in each jurisdiction.
Fragmented control
The group structure made the situation harder to manage. Ownership and intellectual property were held in one jurisdiction. Manufacturing capability and workforce were in another. That split limited what any one party could do. Officeholders could not act across the full business. Decisions taken in one country could not be enforced in the other without further legal steps.
Recognition did not fix this. Even where UK proceedings were recognised in Italy, the fact that the Italian Liquidation judgment predated the recognition judgment meant that the Joint Liquidators still lacked the powers needed to manage assets, employees, or operations independently from the Italian office holders. Additionally, the legal vacuum post-Brexit meant there was no automatic right to deal with assets located in another jurisdiction.
This created practical barriers at every stage:
- Assets could not be transferred or managed freely
- Information was harder to access across jurisdictions
- Operational decisions required coordination that did not exist
At the same time, the case involved multiple proceedings and entities, each with its own priorities. The business could not be treated as a single unit, but if there was any chance of preserving its value (and around 200 jobs in Bologna), Quantuma had to find a way to do exactly that.
High stakes
Without coordination, the likely outcome was fragmentation, with assets sold off separately, intellectual property detached from operations, and a prolonged legal battle both in England and in Italy which would have greatly reduced the value of the enterprise and of the brand. However, in La Perla’s case, there were even greater risks.
The manufacturing site in Bologna was central to the brand. It relied on a specialist workforce of skilled embroiderers and a production capability that had operated for decades. If production were to stop, the impact would be immediate. Restarting again later would be a massive challenge. A further issue was that La Perla was an Italian fashion icon, with the business carrying economic and social importance in Italy. Employees, unions and public authorities all had an interest in the outcome.
These factors meant that the case was not driven by financial considerations alone. Preserving jobs and maintaining production mattered as much as maximising recoveries. Delays increased risk, and misaligned decisions would reduce the chance of preserving the business as a whole.
A perfect storm
The La Perla insolvency brought together several challenges at once:
- The business was split across countries, with both sides having an interest in controlling the outcome
- The lack of a recognised insolvency mechanism since Brexit had led to competing jurisdictions and parallel proceedings
- There were human considerations behind the numbers that needed to be resolved
None of these issues could be addressed in isolation. Before any sale or restructuring could take place, the parties involved had to find a way to manage them together. In our next article, we will share how Quantuma did just that.
Get the full story
Quantuma has compiled a detailed case study on the La Perla insolvency. In it, you will find out how we solved complex cross-border challenges, saved an iconic fashion brand and set the tone for future cross-border insolvency cases.
Download your copy of the La Perla Whitepaper here.
Here to help
Businesses and advisers facing financial distress that spans more than one jurisdiction should seek specialist advice at an early stage. Early engagement allows more options to be considered and increases the likelihood of preserving value and operational continuity.
Quantuma’s Restructuring & Insolvency team advises companies, lenders and stakeholders on complex cross-border matters. To discuss a situation in confidence or learn more about the firm’s experience in multinational restructurings, please contact Carl Jackson or Andrea Terraneo from Quantuma’s Restructuring & Insolvency team.
