Recent decisions by the Court of Florence concerning The Italian Sea Group (“TISG”) offer important guidance on ownership, contractual remedies, and bank guarantees when a yacht builder enters restructuring proceedings.
June 2026: protection lifted for five owners
TISG entered Italy’s negotiated crisis settlement procedure (composizione negoziata della crisi) on 16 March 2026. Its application for protective measures was registered with the Court of Florence. On 20 April, the Court confirmed those measures for 120 days, running from 16 March to 14 July 2026, temporarily restricting enforcement and contractual action by creditors and yacht owners.
By an order deposited on 10 June 2026, the Court upheld appeals brought by five yacht owners and partially reversed its order of 20 April insofar as the protective measures applied to them.
According to TISG’s announcement of 10 June, the yachts under construction already belonged to those customers. They were therefore neither assets of the builder nor assets used by TISG to conduct its business.
The Court also found that the five owners could not be treated as creditors subject to the protective measures simply because they were seeking performance of their construction contracts. They consequently recovered the right to exercise their contractual remedies, including termination where permitted by the contracts and applicable law.
The order applied only to the five owners who had filed the appeals. The protective measures remained effective for all other owners and creditors.
July 2026: restrictions on termination and guarantees removed
At the end of June, TISG requested the closure of the negotiated settlement procedure. On 1 July 2026, it applied to the Court of Florence for access to proceedings under Article 44 of the Italian Crisis and Insolvency Code (“CCII”), giving the company time to prepare a formal restructuring proposal.
On 6 July, the Court confirmed general protective measures for four months from 1 July and provisionally granted additional interim measures without first hearing the affected parties. These prevented owners from terminating their contracts in response to alleged defaults by the builder, calling certain guarantees, or obtaining payment from guarantors. The measures also addressed receivables assigned by strategic suppliers to factoring companies, as set out in TISG’s announcement of 7 July.
Following the subsequent hearing, the Fifth Civil Division of the Court of Florence issued a further order on 29 July 2026 in the Article 44 proceedings. The Court revoked the interim restrictions preventing owners from exercising contractual remedies and calling on guarantees. It also removed the prohibition on payment by guarantors.
The reason given by the Court is significant. TISG’s revised draft restructuring plan no longer contemplated continuing work on all projects in the order book. A general freeze affecting every yacht owner was therefore no longer sufficiently connected to the restructuring strategy actually being pursued.
The Court nevertheless retained a more limited measure for strategic suppliers working on projects that TISG still intends to complete. For those contracts, which the draft plan identifies as profitable, TISG is to pay the suppliers directly, without prejudice to the existing rights of the factoring companies.
The order of 29 July did not affect the general protective measures confirmed on 6 July, which remained in force. The scope of the decision is described in TISG’s announcement of 29 July.
The wider legal significance
The decisions do not mean that yacht owners will always prevail over a shipyard seeking restructuring protection. Nor does the removal of an injunction automatically establish that a termination is valid or that payment is due under a guarantee.
They do, however, highlight three important principles.
First, ownership matters. Custom-build contracts should state clearly when title to the hull, equipment, and materials passes to the customer. Title, possession, and risk are separate concepts, and the way they are dealt with may materially affect an owner’s position if the builder encounters financial distress.
Second, interim measures must remain connected to the restructuring plan. Where a project is no longer intended to continue, restricting the owner’s contractual remedies may be difficult to justify as necessary for the restructuring.
Third, contractual formalities remain essential. Before terminating a contract or calling a guarantee, an owner must still comply with notice requirements, cure periods, guarantee wording, expiry dates, governing-law provisions, and the agreed dispute-resolution procedure.