C-328/99

ITALY AND SIM 2 MULTIMEDIA v COMMISSION

OPINION OF ADVOCATE GENERAL GEELHOED delivered on 27 September 2001 1

I — Introduction 3. In these two joined cases, the dispute relates to the interpretation of the private- investor principle in the assessment of State aid and whether aid can be recovered from an undertaking which, using part of the assets, has partially continued the activities of the original beneficiary undertaking. 1. On 2 June 1999, the Commission adopted Decision 2000/536/EC concerning State aid granted by Italy to Seleco SpA (hereinafter the 'contested decision'). 2 Essentially, this decision establishes that there is State aid, that the aid is incom- patible with the common market and that the unlawful aid must be recovered.

II — Facts and Law

5. Until it was declared bankrupt, on 8. Friulia is a finance company controlled 17 April 1997, Seleco SpA (hereinafter by the Region of Friuli-Venezia Giulia; it is 'Seleco') was engaged in the consumer- responsible for promoting the economic electronics markets, more specifically in the development of that region. sector of colour-television sets, decoders for encrypted programmes (in the pay-TV sector) and professional products (video- projectors and monitors). In the last 10 years before its bankruptcy, Seleco regu- larly received public aid. The present case relates to an aid operation in 1994 and 9. REL is controlled by the Ministry of 1996. Industry, Commerce and Craft Trades. This public undertaking, established in 1982, had the remit of reorganising the consumer-electronics sector by setting up companies, by taking holdings in existing companies and by financing undertakings in which it had holdings. Earlier procedures regarding State aid show that the Commis- 6. Multimedia was established in 1995. In sion required the Italian authorities to March 1996, the most profitable of Seleco's liquidate REL; it noted the Italian Govern- activities (video-projectors and monitors) ment's undertaking that, by the end of were transferred to Multimedia, which 1995, REL would sell off to private share- became Seleco Multimedia Sri; at that time, holders its holdings in the undertakings Seleco held all of the shares. In July 1996, a within the consumer-electronics sector. It is third of the shares were sold to Italtel and a also stated in that decision of 20 May 1992 third to Friulia; a third remained with a (OJ 1992 C 166, p. 6) that no new aid company belonging to the Seleco group. operation would be approved. The block of shares in Seleco Multimedia Sri which Seleco controlled through that company was sold in December 1997 to another private company in a public auc- tion pursuant to a court order. The name of that company at present is SIM 2 Multimedia.

re-capitalisation, total debts considerably 12. However, massive losses were incurred exceeding the equity capital. In those again in 1994 and 1995 and, by the end of circumstances, the shareholders originally 1995, they were again compelled to wind opted for winding-up but, following the the company up or re-capitalise it. Again intervention of the Italian Government, they decided to re-capitalise. Sorec, a new concerned by the social unrest caused by shareholder, contributed ITL 28.8 billion the decision to wind it up, it was finally and, in addition, REL released its outstand- decided to re-capitalise. This government ing claim of ITL 65.2 billion for ITL 20 action meant that REL would cover all billion. Since not even that was enough to debts in excess of the equity capital, includ- save Seleco — from the legal point of ing those portions that should be met by the view — Seleco issued a debenture loan other shareholders, and that the other (subscribed to by a consortium of public shareholders would reconstitute the com- and private banks), Friulia granted a con- pany capital. REL agreed provided that the vertible loan of ITL 12 billion and two others would reconstitute the company thirds of Seleco's shareholdings in Multi- capital. The agreement between REL and media Sri were sold for ITL 20 billion. the other shareholders was formalised by a directive from the Italian Government and was subsequently notified to the company. REL therefore partially wrote off its claims on Seleco (ITL 16.8 billion out of a total of ITL 82 billion), Friulia contributed ITL 13 billion (7 billion in new capital, ITL 6 billion converting the claim into Seleco shares), Sofin contributed ITL 19 billion and the balance of ITL 10.5 billion was provided by a consortium of banks. 13. Following re-capitalisation, the equity capital was distributed as follows: Sorec held 87.91%, Sofin 5.22%, Friulia 3.49%, the banks 2.82% and employees 0.56%.

By a decision of 3 February 1998, the Commission extended the procedure under Article 88(2) EC. The reason for that extension was that the Commission had — the injection of ITL 10.5 billion by a learned from press reports that new aid consortium of banks, chiefly private- measures had been adopted for Seleco. The sector, as part of the recapitalisation of Commission also wished to make a detailed Seleco in 1994;

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— the operation by Seleco in July 1996 to Article 87(1) EC and, secondly, that their repurchase its outstanding debt of actions were inevitable and designed chiefly ITL 66 billion to REL, for ITL 20 to safeguard their claims and that that also billion; applied in relation to the public-sector banks which (as regards the 1996 oper- ation) had imposed the same conditions as the private-sector banks. Those interven- tions were therefore not regarded as aid.

— the convertible loan of ITL 12 billion granted in April 1996 by Friulia for five years at 7% against a guarantee con- sisting of Seleco's four industrial brands; 18. The Commission also concluded that the Friulia and Italtel investments in Multi- media were not State aid within the mean- ing of Article 87(1) EC. It was relevant here that Italtel (owned as to 50% by Siemens and 50% by the public undertaking Stet) — the debenture loan of ITL 12 billion had had to obtain approval from its private granted in 1996 by a consortium of shareholder and that this was an invest- banks, chiefly in the private sector, for ment in a firm operating in a particularly four years and 10 months at 5%; dynamic and promising sector.

(a) the partial write-off in 1994 by Ris- trutturazione Elettronica SpA of ITL 16.8 billion on a loan of ITL 82 billion; 'Italy shall take all necessary measures to recover the aid referred to in Article 1, which has already been granted unlawfully, from Seleco SpA and, additionally, with regard to the part not recoverable from Seleco, from Seleco Multimedia srl and any other firm which benefited from asset transfers designed to frustrate the effects (b) the repurchase in 1996 by Seleco SpA of this decision.' of its outstanding debt to Ristruttura- zione Elettronica SpA of ITL 65.2 billion for ITL 20 billion;

21. The Commission describes the oper- ations specified in Article 1 of the decision (c) the conversion into shares by Friulia as State aid because the actions of both SpA of an ITL 6 billion loan granted by Friulia and REL were not those of a private it in 1992; investor. The Commission also examined those operations in the light of the criteria set out in the Community guidelines on State aid for rescuing and restructuring firms in difficulty,3 to determine whether

(d) a capital injection of ITL 7 billion by 3 — OJ 1994 C 368, p. 12. These guidelines have since been replaced by a new communication, published in Friulia SpA in 1994; OJ 1999 C 288, p. 2.

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the aid qualified for exemption under of the investigation, the initiation of the Article 87(3)(c) EC, and established that procedure or the final decision) and, lastly, those criteria were not taken into consider- the economic logic of the transaction. ation. It was therefore aid incompatible with the common market.

23. Regarding this section of the operative part, the Commission explained in the preamble to the decision that, in order to 25. As stated in the introduction to this prevent the effectiveness of the decision Opinion, both the Italian Government and from being frustrated and the market from SIM 2 Multimedia have brought actions continuing to be distorted, the Commission against this decision. might be compelled to require that recovery be not restricted to the original firm but be extended to the firm which continued the activity of the original firm, using the transferred means of production. Import- ant factors here were the purpose of the transfer (assets and liabilities, continuity of 26. In Case C-328/99, the Italian Govern- the workforce, bundled assets, etc.), the ment claims annulment of the decision and, transfer price, the identity of the share- in the alternative, annulment of that part holders or owners of the acquiring firm and relating to REL's intervention in 1996 and, of the original firm, the time at which the in the further alternative, annulment of the transfer was carried out (following the start part relating to recovery from Seleco Multi-

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media Sri and from any other undertaking IV — Analysis to which Seleco assets have been trans- ferred. Finally, it claims that the Commis- sion be ordered to pay costs.

31. In these cases, there are two central issues. The first is whether, having regard to the private-investor principle, there is State aid here. The Italian Government 27. In Case C-399/00, SIM 2 Multimedia argues against this while the Commission claims annulment of Article 2(1) of the believes otherwise. contested decision and claims that the Commission be ordered to pay costs.

capital injections)4 essentially maintains 35. Regarding REL's intervention in 1994, that the operations carried out by REL the Italian Government notes that the claim and Friulia are the same as those of a of ITL 82 billion was entirely unguaranteed private investor and that this is therefore and that, if Seleco were wound up, there not State aid. It admits that there was an was no possibility of REL recovering even a element of risk in both re-capitalisation part of its claim. Nor was it strange that for exercises (1994 and 1996), but there was a the fifth time, with the proviso that the reasonable possibility of success, based on other investors should pay for the entire an ex ante assessment. In this context, the re-capitalisation themselves, REL should Italian Government observes that the pub- make a further contribution in the form of lic capital injected in 1994 was about a partial write-off of its claim. In this way ITL 30 billion and the private capital REL had disengaged from Seleco's equity injected about ITL 32 billion. In 1996, the capital but kept intact the ability to recover contribution from Friulia came to ITL 12 its outstanding claim. And its agreement in billion and that from REL to ITL 45 1996 to re-purchase of the outstanding billion, whilst the public sector contributed claim of 1TL 65.2 billion for 1TL 20 billion ITL 40.8 billion. That substantial input of can be explained by the same motive. capital with a relatively large number of private investors shows that the two oper- ations to relaunch Seleco's activities were regarded as being sufficiently likely to succeed by a private investor operating under normal market economy conditions.

ruptcy. In addition, the Italian Government hereinafter 'KPMG'). That applies also to remarks here that, by contrast, the Com- the restructuring plan presented in 1996, mission did regard as acceptable a deben- entirely based on the 1994 plan, with no ture loan of the same amount granted by modifications or revisions worth mention- the banks, including public banks, even ing. though that bank loan was granted at a lower rate of interest and that there was no guarantee. In contrast to what is stated in point 91 of the preamble to the contested decision, Italian law lays down that, where a bankrupt company is being wound up, the debts arising out of a debenture loan 39. According to the Commission, the are not repaid before the other unsecured decision not to wind Seleco up, in par- claims. ticular in 1994, and the participation by private investors in the re-capitalisation were in reality dictated by the Italian Government and do not constitute a decision taken by a private investor oper- ating under normal market conditions. The fact that private investors took part in both re-capitalisations cannot, the Commission 37. The Commission, referring to the Com- maintains, give automatic justification for munity guidelines on State aid for rescuing the interventions by the public authorities. and restructuring firms in difficulty, 5states Those public authorities should not get that the measures in favour of Seleco do not involved in senseless investments in which conform to the private-investor principle. poorly-informed private investors had also According to the Commission, the aid to mistakenly taken part. Seleco was granted only to delay its col- lapse as long as possible and to avoid the social consequences that would have arisen from a company plan.

— where the public authorities' holding involves the taking over or the continu- ation of all or part of the non-viable 41. Section 3.3 also lays down that there is operations of an ailing company State aid: through the formation of a new legal entity;

'— where the financial position of the company, and particularly the struc- — where the injection of capital into ture and volume of its debt, is such that companies whose capital is divided a normal return (in dividends or capital between public and private share- gains) cannot be expected within a holders makes the public holding reach reasonable time from the capital a significantly higher level than orig- invested; inally and the relative disengagement of private shareholders is largely due to the companies' poor profit outlook;

— where, because of its inadequate cash- flow if for no other reason, the com- — where the amount of the holding pany would be unable to raise the exceeds the real value (net assets plus funds needed for an investment pro- value of any goodwill or know-how) of gramme on the capital market; the company...'.

•— where the holding is a short-term one, 42. The Community guidelines on State aid with duration and selling price fixed in for rescuing and restructuring firms in

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State aid within the meaning of 47. I believe that it follows from this that Article 87 EC. 10 particular account must be taken of the financial position of the firm and its pros- pects of long-term viability. In the case of a firm in difficulty, as in this instance, it must further be added that there must be a 45. The parties concerned do not dispute detailed, credible and realistic restructuring the private-investor principle, as under- plan. If there is no such plan, no reasonable stood in a number of Community rules, investor would still wish to invest in such a but, in this particular case, they interpret company. the relevant facts and circumstances dif- ferently. It must therefore be examined whether the Commission could reasonably determine that the conduct of REL and Friulia was not like that of a private investor when they took those investment decisions.

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return within a reasonable period or that, 53. The Italian Government's argument as in the present case of a firm in dif- that private parties had also taken part in ficulties, there is a reasonable prospect that, the 1994 and 1996 aid operations does not following restructuring, the firm may alter the fact that this was aid. It has return to profitability. For this purpose it already been stated above that, ex ante, no is essential to have a detailed, credible and private investor would have committed realistic restructuring plan; in this instance capital to the firm. And it may therefore there was no plan that met those require- be assumed that those private investors ments. were prepared to do so only after the government had adopted new measures of support. It is not relevant how far private investors were prepared to take part — the point is rather what a private investor would have done had REL and Friulia not 50. The report by KPMG, who were been prepared to inject new capital. The requested by Friulia to study the answer is that he would not have invested, 1993-1996 restructuring plan, concludes and I see confirmation of that in the that the Seleco restructuring plan was too original decision not to re-capitalise but to ambitious because of both the firm's pos- liquidate. The Italian Government's argu- ition and the assumptions underlying the ment relates to a point in time after the plan. Because of the market situation Italian authorities had already announced (saturated market, fierce price competition that they intended to give financial aid. But and strong adversaries on the demand side the course of events was different. of the market holding substantial negotiat- ing power), the Commission was able to conclude that the assumptions underlying the business plan were not realistic and that Friulia's conduct was not that of a rational private investor.

for the public and private investors appears convertible loan of ITL 12 billion might unsustainable to me. The Commission never earn an acceptable return. It was also properly did not regard the loans from the aware that, just before that, Seleco's most private and public banks as aid, because the profitable activities had been transferred to banks took that decision only after the Multimedia. The fact that Seleco's share- Italian public authorities had already taken holders had originally decided to wind it up the initiative of a rescue operation. That at and that they subsequently decided to go least gave them a chance of putting their back on that decision, probably under claims, which immediate liquidation would pressure from the Italian Government, does have lost, into safety for the time being. not argue in favour of market-compatible And the public banks and the private banks conduct which is expected from a private concerned also granted the additional loans investor. on the same terms.

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It argues that the obligation imposed on shall firstly examine the question whether REL to repay the ITL 20 billion which it recovery can be extended to the firm which received for relinquishing its claim of has continued the activities of the original ITL 65.2 billion and to demand its full beneficiary undertaking. Then I shall con- claim instead does not make sense. No sider whether SIM 2 Multimedia can be rational purpose would be served by mak- regarded as the 'successor' to Seleco Multi- ing the full demand. media/Seleco and, lastly, I shall consider the other — particularly procedural — aspects.

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that at that time Seleco Multimedia was benefit from it. As part of the reorgani- still an integral part of Seleco and was sation, Seleco transferred its most profit- wholly controlled by the latter. The Com- able assets (decoders, monitors and video- mission also refers to the Boch II judgment projectors) to Multimedia, thereby dis- (in Case 40/85 Belgium v Commission, engaging from both the capital and the cited in footnote 7), where the Court ruled assets. That business was in fact working that it was not relevant that a firm should well and had serious prospects of profit. In have two divisions of which one had view of the fact that the most important produced better trading results than the business assets of the firm — together with other and even a very modest profit for the the benefits obtained through the aid year during which the disputed injection of measures — were transferred to the sub- capital had been effected. Both divisions sidiary, Seleco Multimedia, that company were part of the same undertaking and the obviously must be able to accept liability in nature of the injection in dispute must be the place of Seleco, the parent company. established in respect of the single under- taking.

68. This transfer took place during the formal procedure of inquiry and before it was concluded. If a firm in difficulties and 66. The Commission observes that the on the point of bankruptcy were permitted, 'September 1995 Restructuring Plan' was during the course of a formal procedure of never submitted to it in the course of a inquiry, to establish a subsidiary with the formal procedure, and its admissibility is intention that subsequently (prior to the therefore open to question. The Commis- conclusion of the procedure), its most sion believes that this plan does not meet profitable activities would be transferred the requirements that can be prescribed for to it, that would open the possibility of a restructuring plan and that it does not every firm removing assets from the include measures whereby a profitable resources of the parent company when aid strategy can be guaranteed in the future. was repaid.

70. The Commission also maintains that the price for disposal of the multi-media business was influenced and dictated by the circumstances. In other words, in setting the selling price and the value of these assets, the parties must have been aware of 73. Concerning the alleged infringement of the risks inherent in a procedure under the right to a fair hearing, the Commission Article 88(2) EC and, in particular, of a observes firstly that neither the national requirement subsequently to repay aid held authorities nor the firms concerned have to be illegal. That was a known possibility met their duty to cooperate in good faith. which could not be ignored, and the parties Secondly, the Commission considers thai- were aware of this, because the communi- Multimedia which, from the economic and cation of initiation of the inquiry procedure organisational viewpoint, is the same as was published in the Official Journal Seleco, could not be unaware that it also (OJ 1994 C 373, p. 5) and Seleco had was subject to the obligation of repayment. already been aware of it. Thirdly, the Commission stresses that Multimedia was directly named in the communication published in 1998 regard- ing extension to itself of the inquiries. Lastly, the Commission observes that infringement of the right to a fair hearing can lead to annulment only where the outcome of the procedure would have been 71. In any event, the Commission points different in the absence of that irregularity. out that the selling price is not relevant here, since this is a transfer of shares.

from the beneficiary undertaking is of, the action for revocation follows the intended to re-establish the previously 'undertaking'. In other words, the aid is to existing situation. 13 That objective is be recovered from the undertakings which attained once the aid in question, plus actually benefited from it 15 and it is not interest where appropriate, has been repaid relevant who is holding the shares. Even by the beneficiary. By repaying the aid, the where shares have been disposed of, it is beneficiary forfeits the advantage which it logical that the right to recovery should had enjoyed over its competitors on the continue because the undertaking, having market, and the situation prior to payment changed only the new shareholders, has of the aid is restored. 14 continued the market activities financed with State aid and has enjoyed the benefit of unlawful aid, with the result that com- petition continues to be distorted.

75. That objective — restoration of the earlier situation — might be frustrated if, during the course of an administrative procedure from which an unfavourable outcome is expected, or following such unfavourable outcome, the beneficiary firm 78. In my opinion, the following applies puts the most profitable portions of its where the undertaking has been sold by resources into a 'safe place'. means of a transaction involving all or part of its assets (liabilities).

76. The question therefore arises whether and, if so, from whom the aid can be recovered if the firm is 'disposed of'. A 79. In the case of a group of legal persons number of situations may arise. (a holding company) which together com- prise an economic unit — and thus an undertaking — the aid obtained can be recovered both upwards and downwards in the parent-subsidiary links between the relevant companies within that economic unit, and not only from the 'beneficiary' 77. In the case of a transfer of shares, the entity within the group. Any restructuring solution is quite simple: we find from within that economic unit is not relevant case-law that, where shares are disposed for this purpose. 16 Incidentally, I should

like to observe also that where, in a similarly where only specific activities have restructuring, part of the economic activity been taken over, provided the market price is transferred to a new legal entity as a has been paid for them. 18 going concern and subsequently that is transferred in legal and functional terms outside the original unit, subject to certain conditions, in my opinion, that new under- taking remains the 'beneficiary', in particu- lar where it is likely that the activity which it conducts benefited from the aid earlier. It would otherwise be easy to evade the practical effect of the control and recovery 82. But situations may arise where, in my of State aid unlawfully received by bringing opinion, the purchasing party also may be about a restructuring within the group required to repay the aid received. This either during a procedure or when it is may occur where the disposal is effected concluded. during the formal inquiry procedure. If the undertaking is transferred as a going con- cern, normally the assets and the liabilities are transferred and the new proprietor of the undertaking must answer for the debts and obligations taken over. In that case there may be an obligation to repay aid which is illegal or incompatible with the common market and was granted to the 80. Lastly, the situation may arise in which transferred undertaking previously. And if the beneficiary undertaking is partly or wholly disposed of to third parties outside the activities of the original beneficiary firm the holding company. are continued with the assets acquired, here too there is a good case for adopting an economic criterion and looking for a link with the entity which is continuing the economic activities. For here also activities subsidised with public money, with all the consequences which that entails, arc still in being. That is the case particularly when the receipts from the disposal accrue to the 81. Recent case-law has established that, in firm which is likely to become bankrupt in principle, where a company that has bene- the short term. In such a situation, the fited from aid in the past has been sold at selling price is influenced by that prospect- the market price, the purchase price will ând some of the benefits from the aid reflect the consequences of that earlier aid operation accrue to the undertaking that and the seller of that company keeps the has been hived off, whereas the owner benefit of the aid. In such a case, the making the disposal does not derive a previous situation is to be restored pri- corresponding and, probably, permanent marily through repayment of the aid by the benefit from it. Other accompanying cir- seller. 17 Earlier case-law has already ruled cumstances may also be relevant here, such

83. If we look at this particular case, we see that Seleco, or at least its most important shareholder, first (in July 1995) established a legal entity and then, having in the meantime become the sole shareholder, transferred the main profitable activities It should be observed here that although, in to it (February/March 1996). Loss-making Community law on competition, natural or activities were transferred elsewhere in the legal persons legally separate but constitut- group. Both these operations are still within ing an economic unit are treated as a single the Seleco group. Lastly, some months undertaking, that does not happen auto- later, in July 1996, two blocks of shares matically in the case of State aids. This were sold, one to Friulia (also a shareholder question — whether there is or is not an in Seleco) and one to Italtel. A third block economic unit — arises in the context of remained with Seleco through a company State aids when identifying, among other controlled by it. This second operation items, the beneficiary of the aid. The related to a transfer of shares whereby Commission has considerable latitude in Seleco Multimedia was taken out of the determining whether companies belonging Seleco group. to a holding company are to be regarded as an economic unit or as legally and finan- cially separate undertakings. In this case, the Commission has produced sufficient proof that, even after the transfer of the activities to a separate company, there was still a single undertaking, and that company From this combination of events we have to is in principle included among the bene- deduce that, in anticipation of a bank- ficiaries. Even had it concluded otherwise, I ruptcy that looked almost certain, Seleco believe that what I have said at point 79 of split the profitable activities from the loss- this Opinion would hold good in this case. making activities; in other words, it set up a hive-off vehicle.

88. I therefore believe that, in certain circumstances, aid can be recovered from the purchaser, particularly where — by creating a hive-off vehicle during or immediately after initiation (or conclusion) of an i n q u i r y p r o c e d u r e u n d e r 87. The I t a l i a n G o v e r n m e n t and Article 88(2) EC — the most profitable SIM 2 Multimedia have referred to the parts of the firm are hived off for sub- Alfa Romeo judgment. 19 That judgment sequent sale. also related to a disposal to third parties, where the price was set by an independent expert and the operation only concerned the hiving off of a small part of the firm. In that case, the aid was recovered not from the purchaser but from the vendor. In fact the parallel with the present case is not relevant. Although in that case the Court ruled that Finmeccanica, the holding com- 89. The Commission has produced suffi- 19 — Judgment i n Case C-305/89 Italy v Commission ('Alfa cient proof that that occurred in this Romeo'), cited in footnote 9. instance.

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Rights of the defence initiative have submitted documents or comments that might assist the Commis- sion in reaching a final decision. But it did not avail itself of either opportunity.

90. The parties claim infringement of their defence rights, because they have not been heard, because the Commission has not shown that Multimedia did actually benefit from the aid and because the recovery is disproportionate.

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the decision to initiate the procedure. comments or contact the Commission ser- T h e r efo re I cannot agree with vices. SIM 2 Multimedia that the Commission should have informed it individually.

94. Lastly, as the Commission has also observed, any infringement of the right to a fair hearing can result in an annulment only if the outcome of the procedure could have been different in the absence of such irregularities. The documents submitted and explained by SIM 2 Multimedia do not suggest that the outcome would have been different.

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business' profited from the aid operations. shortly afterwards, the less viable parts Firstly, as the Commission observes, Seleco would be allowed to die. In such a situation Multimedia was — at least until 18 July we may consider that not only the assets of 1996 — part of Seleco. At least up to that the healthy part have been transferred but date, therefore, it profited from the aid also its economic activities. The Commis- granted to Seleco. It can even be main- sion has produced sufficient proof of this tained that it owes its very existence to the also. In such a case, the Commission may aid because, without the 1994 re-capitali- demand that all of the aid be recovered sation, it would have been wound up: the from that firm. fact that the figures for this division show a better picture in no way alters the position. And SIM 2 Multimedia's argument that it did not benefit from the 1996 aid, because the convertible loan was made in May 1996 and the re-capitalisation occurred in June 1996, is unsustainable. As the Com- mission has rightly observed, without a denial from SIM 2 Multimedia, that aid 100. Finally, the fact that — as the parties operation was to cover the losses made in maintain — they have paid a reasonable 1994 and 1995 and was thus retrospective price for the shares in that company is not aid for a period in which Seleco had not yet relevant, because this transfer is of shares hived off its multi-media activities — not and not of assets or of assets-and-liabilities. aid for the future, such as, for example, investment aid.

thermore, this would be a debt under here of Article 14 of Regulation private law. No 659/1999. The Commission has deter- mined only that the amount must be recovered, that if Seleco has insufficient funds it must be recovered additionally from Seleco M u l t i m e d i a Sri (now SIM 2 Multimedia) or any other firm to which the assets were transferred, and that (see points 113 and 114 of the contested 102. I consider that it follows from what decision) Italy must act energetically to that has been stated above that, in certain end using all the legal means at its disposal, conditions, repayment is not confined to like a diligent private creditor. the original beneficiary firm but may be extended to that firm which has continued the activities with the means of production transferred. From this it follows that, in order to avoid the risk of non-implemen- tation of its decision on recovery, the Commission may also require that a Member State must take all necessary measures to recover from the 'original beneficiary' and if necessary from the latter's 'successors'. In other words, it may instruct the Member State to act not only against Seleco but also against the firm which has continued the activities with the assets transferred. 104. Concerning observations made by the Italian Government that, under Italian legislation, it is not possible to recover these amounts from SIM 2 Multimedia, it should be observed that the Court has consistently held that any procedural or 103. Next, the Member State concerned other difficulties in regard to the imple- has the duty of proceeding to recover the mentation of the decision have no influence unlawful aid immediately. To that end, the on the lawfulness of the decision. 23 The Member State must make use of all possible Court has also already stated that, even if legal resources open to it. This follows not in Italian law it is not possible to recover only from the case-law; it is now also sums which were not taken into account in codified in Regulation No 659/1999. the conditions of sale of the undertaking, that cannot stand in the way of the full application of Community law and can therefore have no effect on the obligation to recover the aid in question. 24