Montemurlo, ITALY-- Italvelluti spa, a well known producer of unicolor faux suedes for the furniture industry, a major supplier to Natuzzi as well as other manufacturers,  has been operating  under the protection of Italian liquidation laws for the past three months

These relatively new laws give companies a chance to work things out with their creditors before outright liquidation. It is understood that the Italian courts will soon decide how much Italvelutti can pay its creditors. While the outcome is not yet known, Italvelluti continues to ship goods to customers, a company source told F&FI. Nobody can understand how Italvelluti, always considered a successful and innovative company, got into such financial difficulty.

Neither Silvio Massi, the owner, nor Gianni Bartolini, the former sales manager could be reached for comment. Bartolini, who was with Italvelluti for 24 years left the company on March 29. His plans are not known.

No official statements about the company’s status have been made up to now but a company spokesman told F&FI that Massi was preparing a statement.

Over the past 12 months, Europe, especially Italy has overhauled its bankruptcy laws in the hopes of saving companies and the jobs that go with them. The new laws are based to some extent on elements of U.S. Chapter 11 laws which allow companies to operate under the protection of the courts until they can work out solutions with the creditors. The emphasis in Europe has shifted to working things out with the creditors instead of immediate liquidation.

In Italy, companies like Italvelluti can ask the courts for protection for three months while they try to work out their difficulties.  Italvelluti is at the end of this timeframe and must either close or come up with a plan to satisfy its creditors.