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1
Yukhumenko, V. "INSOLVENCY OF INSURANCE COMPANIES IN UKRAINE: DETECTION AND PROGNOSTICATION." Innovative Solution in Modern Science 5, no. 41 (November 3, 2020): 73. http://dx.doi.org/10.26886/2414-634x.5(41)2020.6.
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The paper demonstrates the results of research on the problems of insurance company insolvency. The outcomes describe the basic principles of detection and using the early warning system in Ukraine. The paper shows the necessity to reorganize the basic principles of the detection of local insolvent insurers. The study also determines the groups of persons who are directly or indirectly interested in the insurer's solvency assessment. This work presents the system of insurance companies' insolvency indicators, which help to identify insolvency at the early stages. The paper distinguishes precautionary, delayed, internal, and external insolvency indicators of insurers. The study divides the values of insurer's insolvency indicators into "yellow" and "red" zones to increase the flexibility of using various instruments for influencing by the regulator depending on the level of danger of the insurance company. This work argues for taking timely measures to the threat of insolvency of the insurance companies by the insurance supervisor.Key words: insolvency, instability of the insurers, solvency, early warning system, insurance market.
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Rajak, Harry H. "Director and Officer Liability in the Zone of Insolvency; A Comparative Analysis." Potchefstroom Electronic Law Journal/Potchefstroomse Elektroniese Regsblad 11, no. 1 (June 26, 2017): 30. http://dx.doi.org/10.17159/1727-3781/2008/v11i1a2751.
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It is the duty of the directors of a company to run the business of the company in the best interests of the company and its shareholders. In principle, the company, alone, is responsible for the debts incurred in the running of the company and the creditors are, in principle, precluded from looking to the directors or shareholders for payment of any shortfall arising as a result of the company's insolvency. This principle has, in a number of jurisdictions undergone statutory change such that in certain circumstances, the directors and others who were concerned with the management of the company may be made liable to contribute, personally, to meet the payment – in part or entirely – of the company's debts. This paper aims to explore this statutory jurisdiction. It also seeks to describe succinctly the process by which the shift from unlimited to limited liability trading was achieved. It will end by examining briefly a comparatively new phenomenon, namely that of a shift in the focus of the directors' duties from company and shareholders to the creditors as the company becomes insolvent and nears the stage of a formal declaration of its insolvent status – the so-called 'zone of insolvency'.
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Catherin, Melia, and Budi Purwanto. "Analisis Kemungkinan Kebangrutan Berbasis Pendekatan Model Z-Score Altman dan Metode EVA pada PT X di Provinsi Kepulauan Bangka Belitung." Jurnal Manajemen dan Organisasi 7, no. 3 (June 5, 2017): 169–83. http://dx.doi.org/10.29244/jmo.v7i3.16680.
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PT X has a regional office in Bangka Belitung Island Province which has been decrease in sales, increase in credit and inventory which may lead to insolvency. The purposes of this research was (1) to analyze the financial performance of PT X to learn factors affecting insolvency possibilities; (2) to analyze company condition that indicate insolvency possibilities; (3) to analyze the added values which could be given by the company in an insolvency possibility; (4) to analyze the relation of added values that had been given by the company with insolvent condition possibility. The primary data were gathered by interview. Secondary data consisted of financial reports, journal literatures, thesis, and related books. The data were processed through descriptive analysis, financial ratio, Z-score Altman model, and EVA method. Based on the descriptive analysis result, PT X was suffering a possibility of bankruptcy that may affect firm value which was also decrease. The financial ratio showed that cash ratio, operational profit margin, inventory cycle, credit cycle ratio, assets cycle ratio were decrease, DER and DAR were decreasing from 2010 until 2012, but it roused significantly in 2013 and turned back to decrease significantly on 2014. The result form Z-Score model showed that the company was in gray area in 2011, the company condition went better in 2012, but it went back to gray area in 2013-2014. The EVA result showed that PT X produced positive and decreased in EVA value from 2010 until 2014.
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O'Brien, Angus. "Overview: Company and Insolvency Law." Cambridge Journal of International and Comparative Law 3, no. 1 (2014): 257–60. http://dx.doi.org/10.7574/cjicl.03.01.159.
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Khan, Shereen, Nasreen Khan, and Olivia Swee Leng Tan. "DIRECTORS’ DUTY AND LIABILITY IN INSOLVENT TRADING." International Journal of Law, Government and Communication 5, no. 21 (December 6, 2020): 130–37. http://dx.doi.org/10.35631/ijlgc.5210010.
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The effect of the novel coronavirus (Covid-19) pandemic has resulted in current and future liquidity, balance sheet, and cash flow problems. There is an anticipated decline in the profitability of the businesses during this uncertain period and attention has been turned to the directors’ ‘duties and liabilities’ to creditors when the company is on the verge of insolvency. Directors have to strike a balance among the shareholders, creditors, and workers in the corporate restructuring process. In engaging with these stakeholders during the transformation process, the directors play a key role. It is about quick choices and decisions to be taken to save a business on the verge of insolvency, and it is therefore vital that directors act at the first sign of financial distress. There is a general duty for directors not to trade when insolvent or close to the point of insolvency. Directors also have a contractual obligation to avoid insolvent trading. This article discusses the duties of directors under the Companies Act 2016 (CA 2016) to avoid insolvent trading. It further discusses by analysing based on the comparative study with other selected jurisdictions. This article proposes that while it is important to protect creditors’ interest by making the directors personally liable for insolvent trading, for the best interest of all stakeholders, there should be a balance between the security of creditors and the rescue of the company.
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Shubhan, M. Hadi. "Legal Protection of Solvent Companies from Bankruptcy Abuse in Indonesian Legal System." Academic Journal of Interdisciplinary Studies 9, no. 2 (March 10, 2020): 142. http://dx.doi.org/10.36941/ajis-2020-0031.
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In bankruptcy legal system in Indonesia, the court can issue bankruptcy verdict without assess a company’s solvency condition, whether the company is solvent or insolvent. The provision of this law is very prone to be misused by creditors with bad faith. Insolvency test is able to protect debtors and to prevent the abuse of bankruptcy by malice creditors. This paper aims to analyze the legal protection of solvent companies from bankruptcy abuse in Indonesian legal system. By using normative and juridical approach, the results showed that the insolvency test can be included in the future amendment of Indonesian bankruptcy law. The implementation of insolvency test therefore is not administered outside the bankruptcy proceedings, but still in the respective bankruptcy proceedings. Insolvency test can be implemented by judges based on convincing evidences such as money report made by registered Public Accountant Office. A debtor, with bad faith, should not be eligible to get protection to avoid himself from bankruptcy with the insolvency test, although the debtor has good solvability.
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Mamutse, Blanca. "Environmental liabilities in insolvency – an area ripe for reform?" International Journal of Law in the Built Environment 8, no. 3 (October 10, 2016): 243–68. http://dx.doi.org/10.1108/ijlbe-06-2016-0007.
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Purpose The paper aims to examine the question whether legislative reform is the silver bullet for the problems generated by the failure of a company which is exposed to claims arising from the non-fulfilment of its environmental obligations. The limited capacity of the UK insolvency regime to facilitate the fulfilment of a debtor company’s environmental obligations is often illustrated with reference to some significant judicial decisions. However, no real picture has emerged of the frequency with which these issues arise, based on which firm proposals for reform could be advanced. This paper argues that greater regard should be paid to existing mechanisms which provide a means of enabling insolvency risks to be managed or minimised because these point towards the scope for these issues to be resolved through the environmental protection framework rather than through reliance on company and/or insolvency law. Design/methodology/approach Research was conducted into the statutory and non-statutory regulations (such as statutory guidance) and case law principles, which underpin the treatment of the claims against an insolvent (or potentially insolvent) company resulting from its environmental activities. This included research into policies which have a bearing on this area, developed through governmental and civic consultations and studies. Findings The paper concludes that the likelihood of a case for legislative reform being made out is weak, and the focus should accordingly shift to strengthening the effectiveness of existing law, policy and practice. Originality/value This paper is the first (in the UK context) to challenge the perceived need for reform in this area, engaging with recent examples of such corporate failures and the impact of recent legislative and policy developments.
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Schönfeld, Jaroslav. "FINANCIAL SITUATION OF PRE-PACKED INSOLVENCIES." Journal of Business Economics and Management 21, no. 4 (June 11, 2020): 1111–27. http://dx.doi.org/10.3846/jbem.2020.12820.
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This paper is focused on the financial situation of companies entering insolvency proceedings. It does not work with all kinds of the insolvent companies, but this paper concentrates on one specific issue. The issue is pre-pack insolvencies. The main aim is to show if the financial situation is an important factor for consent to pre-pack. The pre-pack insolvencies are insolvency cases which start with an insolvency proposal which is accompanied by a reorganization plan already approved by creditors. Prepacks should help make the insolvency process quicker and enable enterprise financial rehabilitation and sustain the going concern principle. On the other hand, the procedure can hardly be successful when the financial situation of the company is extremely poor. Therefore this paper evaluates the financial situation of the companies with pre-packed insolvency in the Czech Republic. The analysis of companies was conducted over one, two or three year periods prior to the companies entering an insolvency proceeding. According to the literature, financial indicators used for evaluation are commonly EBITDA, cash liquidity, debt ratio, ROA and the Altman Z-Score prediction model. Results for the individual enterprises are summed up in this paper using basic descriptive and variable statistics. Conclusions have especially practical implications because they show financial inability of majority pre-packed cases.
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Prokopowicz, Tomasz, and Tadeusz Krupa. "Modeling of Polish Enterprises Insolvency Processes with the Use of Gorbatov Characterization Principle - Research Results." Foundations of Management 2, no. 1 (January 1, 2010): 71–98. http://dx.doi.org/10.2478/v10238-012-0022-y.
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Modeling of Polish Enterprises Insolvency Processes with the Use of Gorbatov Characterization Principle - Research Results Economical activities of enterprises should be based on such managerial decisions that assure quick and effective adjustment of the company to the changes that appear in the market. Enterprises, which are not able to use their opportunities and avoid threats, are bound to face the thread of insolvency. Effects of the insolvency are felt not only by the enterprise, but also by its creditors. Therefore, it is necessary to elaborate a warning system that will beforehand allow diagnosing the condition of the enterprise and setting necessary directions for the company to avoid insolvency. The article presents research results on the use of characterization theory in the creation of insolvency threat evaluation model based on Polish enterprises.
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Poiedynok, V. V., and I. V. Kovalenko. "RESPONSIBILITY OF DIRECTORS IN BANKRUPTCY PROCEDURES UNDER EU LAW AND INDIVIDUAL MEMBER STATES OF EU." Economics and Law, no. 1 (April 15, 2021): 48–60. http://dx.doi.org/10.15407/econlaw.2021.01.048.
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The Bankruptcy Proceedings Code of Ukraine provides for the possibility of imposing liability under the obligations of the debtor – a legal person on the founders (stakeholders, shareholders) or other persons who have the right to give mandatory instructions to the debtor or have the opportunity to otherwise determine his actions. As a result, "comfortable" organizational forms of companies, such as LLCs and JSCs, have become risky for investors; managers, who may be employees, bear risk too. The article analyzes the legislation of the EU and some EU member states (Germany, France, Spain, the Netherlands, Latvia, Romania), concerning the liability of individuals in insolvency proceedings. We find that the rules on such liability are not harmonized at the EU level; as for individual countries, their laws do provide for the possibility of holding both de jure and de facto directors, whereas the latter may include the founders (stakeholders, shareholders) of the company, for the debts of the company. At the same time, the legislation of European countries describes in great detail the conditions and procedure for imposing such liability, which makes the risks for the individuals concerned predictable. Moreover, special rules on liability in insolvency proceedings are systematically linked to the provisions of company law, which establish the obligation of directors to act with due diligence in the interests of the company and liability for knowingly making business transactions with the knowledge that the company is insolvent (wrongful trading). In Ukraine, there are absolutely no specific legal provisions on the conditions and procedure for holding even de jure directors to liable in insolvency proceedings, not to mention the founders (stakeholders, shareholders) of companies, which creates a situation of legal uncertainty. To eliminate it, the legislation of Ukraine should define: the range of individuals on whom such liability may be imposed; a specific list of actions, the commission of which may give rise to liability; the need to prove the guilt of such individuals; forms of guilt sufficient to be held liable (only intent or also negligence); procedural rules for establishing guilt, including the issue of the burden of proof; who may lay claim to a director (insolvency administrator, creditor, court); statutes of limitations on the liability of directors, etc.
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Bauer, Kinga. "Kryzys finansowy a restrukturyzacja przedsiębiorstw w stanie upadłości." Studies of the Industrial Geography Commission of the Polish Geographical Society 15 (January 1, 2010): 209–18. http://dx.doi.org/10.24917/20801653.15.18.
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Bankruptcy of enterprises is generally recognized as a negative phenomenon. In practice, the institution of bankruptcy aims at protecting interests of the market game participants. It eliminates from the market the enterprises which are not able to conduct their activities effectively. This way, it also protects other entities from establishing relationships with a company which is unable to rival its competitors. The article concerns problems of insolvent and bankrupt companies in the financial time crisis. It brings up theoretical and practical aspects of this issue. Some enterprises are not able to survive as before in the period of economic crisis. In 2009, the number of insolvent and bankrupt companies grew up rapidly. Restructuring can be a response to a crisis or major change in the business, such as insolvency and bankruptcy.The article focuses on the results of basic and scientific research conducted at the Law Court in Cracow at the Department of Insolvency and Bankruptcy.
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Omar, Paul. "Crossborder jurisdiction and assistance in insolvency: The position in Malaysia and Singapore." Potchefstroom Electronic Law Journal/Potchefstroomse Elektroniese Regsblad 11, no. 1 (June 26, 2017): 157. http://dx.doi.org/10.17159/1727-3781/2008/v11i1a2755.
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Malaysia and Singapore are members of the common law family and have 'inherited' their company and insolvency law from models in use in the United Kingdom with influences from Australia. It is the purpose of this article to outline the law in relation to cross-border insolvency, particularly the winding up of foreign companies, the co-operation provisions in bankruptcy and insolvency as well as more recent moves to redevelop insolvency through UNCITRAL and Asian Development Bank initiatives.
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Lee, Sanghoon, Keunho Choi, and Donghee Yoo. "Predicting the Insolvency of SMEs Using Technological Feasibility Assessment Information and Data Mining Techniques." Sustainability 12, no. 23 (November 24, 2020): 9790. http://dx.doi.org/10.3390/su12239790.
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The government makes great efforts to maintain the soundness of policy funds raised by the national budget and lent to corporate. In general, previous research on the prediction of company insolvency has dealt with large and listed companies using financial information with conventional statistical techniques. However, small- and medium-sized enterprises (SMEs) do not have to undergo mandatory external audits, and the quality of accounting information is low due to weak internal control. To overcome this problem, we developed an insolvency prediction model for SMEs using data mining techniques and technological feasibility assessment information as non-financial information. We divided the dataset into two types of data based on three years of corporate age. The synthetic minority over-sampling technique (SMOTE) was used to solve the data imbalance that occurred at this time. Six insolvency prediction models were created using logistic regression, a decision tree, an artificial neural network, and an ensemble (i.e., boosting) of each algorithm. By applying a boosted decision tree, the best accuracies of 69.1% and 82.7% were derived, and by applying a decision tree, nine and seven influential factors affected the insolvency of SMEs established for fewer than three years and more than three years, respectively. In addition, we derived several insolvency rules for the two types of SMEs from the decision tree-based prediction model and proposed ways to enhance the health of loans given to potentially insolvent companies using these derived rules. The results of this study show that it is possible to predict SMEs’ insolvency using data mining techniques with technological feasibility assessment information and find meaningful rules related to insolvency.
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Zieliński, Jakub. "COMMENTARY ON THE RESOLUTION OF THE SUPREME COURT OF 1 DECEMBER 2017, III CZP 65/17." Roczniki Administracji i Prawa 4, no. XX (December 30, 2020): 289–96. http://dx.doi.org/10.5604/01.3001.0014.8443.
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The commented resolution of the Supreme Court primarily concerns the liability of management board members in the situation of company’s insolvency. The Supreme Court held that if the management board member fails to fulfil the duty to file a motion for declaration of insolvency in the situation when he became board member when company was already insolvent, he would not be able to free himself from the liability for company’s debts by proving that creditor would not be able to obtain any satisfaction of his claims even the motion was filled. The maim controversy arising from the abovesaid ruling is the interpretation of the term “damages” used in article 299 of the polish Code of Commercial Companies, which should not be understood in the same was as “damages” within the Civil Code
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Morrison, David. "Trustees in insolvency: the manifestation of Australia’s fascination with the use of the trust as a business vehicle." Trusts & Trustees 25, no. 10 (December 1, 2019): 995–1001. http://dx.doi.org/10.1093/tandt/ttz107.
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Abstract Corporate trustees are prevalent in the operation of businesses in Australia. However, the Corporations Act in Australia makes no express provision for the insolvency of a corporate trustee. Given that the trading trust is often used for commercial purposes in Australia, together with a corporate trustee, it is important that the law reflects a clear and consistent approach in the event of the insolvency of a business owned by a trading trust. It is opined that the position of an insolvent corporate trustee ought to be, as far as possible, dealt with consistently with that of a business held directly by a company. Notwithstanding the recommendations of a 1988 inquiry reporting looming difficulty, no legislative correction has occurred. Consequently, a series of conflicting case law follows. This article considers recent developments in respect of judicial consideration in the context of the recommendations made more than 30 years previously.
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Mardiah Bukit, Ipak Neneng. "COMPETITIVE TENDERING: FAKTOR TERJADINYA INSOLVENCY PADA PERUSAHAAN KONSTRUKSI (SEBUAH LITERATUR)." Jurnal Teknik Sipil Unaya 1, no. 1 (January 31, 2015): 95–104. http://dx.doi.org/10.30601/jtsu.v1i1.10.
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The construction industry is a vanguard in developing countries, including Indonesia. It has unique characteristics where complex works exist. These characteristics distinguish this industry from other industries in economy. Its project involves so many risks that have potentially business failure. Failure, bankruptcy or insolvency is unpleasant words, but people in the industry cannot ignore them. This paper thoroughly explored the causes of insolvency in Construction Company due the procedure of competitive tendering in Indonesia and how to avoid it. Insolvency in Indonesia is caused by lack of business experiences, country’s economic condition, poor control of cash flow, cannot convince clients, and low profit margin as a result of competitive tendering. Some researchs found that insolvency can be predicted at early opportunity, and some methods are applied to prevent insolvency.
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Bork, Reinhard. "Debt Restructuring in Germany." European Company and Financial Law Review 15, no. 3 (November 9, 2018): 503–15. http://dx.doi.org/10.1515/ecfr-2018-0016.
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For a long time, German restructuring and insolvency law had no pre-insolvency restructuring scheme binding on dissenting creditors. Only in opened insolvency proceedings a restructuring plan could be used for debt restructuring. Now the German legislators has taken means to improve German law in three ways: first, by updating the German Bond Act (also known as the German Debenture Act), especially through permitting the change of the bond conditions by a majority vote of the creditors if the conditions allow for such majority vote; second, by improving German insolvency law through the “Act for the Further Simplification of Company Restructuring (ESUG)” which enables the debtor to start early restructuring preparation proceedings (“protective umbrella proceedings”); and, third, by announcing the introduction of new pre-insolvency restructuring proceedings as a reaction to the EU Directive proposed by the European Commission on 22 November 2016.
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Krásnická, Martina, Viktor Vojtko, Zdeněk Strnad, and Rudolf Hrubý. "Simulation of Insolvency Proceedings Year II – Evidence of the Long Term Effect on Cognitive Learning." Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis 65, no. 6 (2017): 1979–85. http://dx.doi.org/10.11118/actaun201765061979.
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The aim of this paper is to draw some conclusions from a long‑term project inspired by the so‑called Mock trials experienced in the USA and applied into the Czech system of law education of students at the Faculty of Economics of the University of South Bohemia. The project involves a simulation of insolvency proceedings in case of a company bankruptcy. The students play roles of the various participants in the insolvency proceedings and learn very relevant but rather complicated process of insolvency. The results of the second academic year involve re‑testing of students included in the SIP 1.0 (Simulation of Insolvency Proceedings 2015/2016) in order to assess if the learning experience has the long‑term impact and comparison with the new group of students that undergone the SIP 2.0 (Simulation of Insolvency Proceedings 2016/2017).
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Jang, Ho-Myun. "Influence of Housing Market Changes on Construction Company Insolvency." Journal of the Korea Academia-Industrial cooperation Society 15, no. 5 (May 31, 2014): 3260–69. http://dx.doi.org/10.5762/kais.2014.15.5.3260.
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Eidenmüller, Horst. "Free Choice in International Company Insolvency Law in Europe." European Business Organization Law Review 6, no. 3 (September 2005): 423–47. http://dx.doi.org/10.1017/s1566752905004234.
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Fachrudin, Khaira Amalia. "Insolvency and financial health prediction model for the listed companies on the Indonesia Stock Exchange." Jurnal Akuntansi & Auditing Indonesia 25, no. 1 (2021): 24–32. http://dx.doi.org/10.20885/jaai.vol25.iss1.art3.
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An insolvency and financial health prediction model is an important warning to decision-makers. This study aims to design a model that provides numbers and ranges for prediction of company insolvency and financial health. The study population is all the listed companies on the Indonesia Stock Exchange, while the sample consists of 216 companies that had negative equity from 2010 to 2019 and 216 companies with positive equity. The independent variables include the solvency and profitability ratios in one and two years before the insolvency. Logistic regression was used as an analysis tool. The results are 24 prediction models. The comprehensive one revealing the solvency ratio in the previous one year and the profitability ratio in the previous one and two years can predict the probability of insolvency and financial health.
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de Weijs, R. J. "Harmonization of European Insolvency Law: Preventing Insolvency Law from Turning against Creditors by Upholding the Debt–Equity Divide." European Company and Financial Law Review 15, no. 2 (September 12, 2018): 403–44. http://dx.doi.org/10.1515/ecfr-2018-0007.
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In essence, insolvency law is collective debt collection law. By means of a collective procedure, insolvency law seeks to ensure that the going concern value is captured for the creditors. Where the shareholders possess the dominant voice outside of insolvency, in insolvency creditors take over this position and become the economic owners of the company. In three different settings shareholders can interfere with the insolvency process and try to capture all the value in the company or at least leave the creditors with the liquidation value and usurp the going concern surplus. These three settings are (i) shareholders as secured lenders, (ii) shareholders as acquirers out of pre-packs or other asset sales and (iii) shareholders under composition plans. The proposed EU Directive on Preventive Restructuring Frameworks and Second Chance (November 2016) contains measures in the field of composition plans as part of a preventive restructuring. The proposed directive addresses the potential problem that shareholders would usurp the going concern surplus by introducing the Absolute Priority Rule. The proposed directive should be considered a first step in the right direction. It should, however, be realized that the protection offered in the proposed directive could easily be circumvented by a shareholder financing not with capital but with secured shareholder loans. Also, if pre-pack sales or other sale processes do not limit interference by shareholders, shareholders will prefer the route of an asset sale above a restructuring.
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Stroie, Cristina, and Adriana Duţescu. "The Enterprise Risk Profile Model and Its Implementation in Reorganised Companies." Proceedings of the International Conference on Business Excellence 13, no. 1 (May 1, 2019): 241–53. http://dx.doi.org/10.2478/picbe-2019-0022.
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Abstract Globalization, as a response to the accelerated developments in recent decades, has shifted the world economy to a direction in which the adaptation to uncertainty conditions has been one of the most important manifestations of rational behavior. Human activity has always been subject to risks and uncertainty, and environmental pressure naturally generates selection and adaptation. The risk profile analysis in insolvency proceedings, as an indicator of managerial and financial health, represents a challenge to complement the gaps in the literature, given the limited studies in the field, compared to the bibliography in the field of risk management, for the companies in the economic circuit. This topic is of major importance for all business environments, having in view the disasters generated by economic crises on companies. In terms of judicial reorganization and insolvency proceedings, the situation in Romania proves to be different from the practices in the countries with tradition in this field and we are referring here to the USA, Germany and France. Comparative studies have indicated dysfunctions in the reorganization procedures in Romania, related to the lack of a coercive system to remove the insolvency debtors from the economic circuit, and the lack of models for analyzing the reorganization capacity of companies in insolvency proceedings. Regarding a possible reorganization of a company, creditors do not have approved analysis models in order to vote on reorganization plans and most of the time, at least as far as public creditors are concerned, their vote is negative and unfounded. The purpose of this research is to generate a model of internal risk analysis specific to the companies undergoing insolvency proceedings and of external risks related to the activity sector, a model able to predict the possibility of reorganizing a company undergoing insolvency proceedings. The main tool used is the interview, conducted on a sample of insolvency experts in Romania, with an average experience of approx. 10-20 years in insolvency and reorganization activities. Based on the analysis of the obtained results, we will refine and restructure a model, and then we will test it on a sample of companies undergoing insolvency proceedings.
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Karaleu, Yury Yu. "Interaction between institutional technologies, wage guarantee schemes and corporate social responsibility in respect of the protection of workers’ benefits in case of company insolvency." RUDN Journal of Economics 28, no. 2 (December 15, 2020): 225–38. http://dx.doi.org/10.22363/2313-2329-2020-28-2-225-238.
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The objective of this paper is the investigation of relationship and interaction between the companies’ insolvency and modern law regulations, social security systems based primarily on wage guarantee schemes and corporate social responsibility (CSR) practice. Evidence shows that despite the significant impact of the company’s insolvency on the personal and civic fate of the workers, the economic and social output still depends on legal regulations. Thus, differences between bankruptcy or restructuring laws in common and civil law countries in terms of their protection of various debtors’ claims have been analysed. The legal origin is not the only contributing factor to the social well-being and safety of people in case of insolvency. In spite the fact, that, as it was shown by J. Boter et al., consistently with the legal theory, patterns of regulation across countries are shaped largely by their legal structures, which were transplantated to most countries, effective implementation of their nationally developed and wellregulated guarantee schemes helps to eliminate the economic consequences of insolvency. Some examples of such regulations as the second element of the guarantee of workers’ benefits in case of company insolvency were also examined in the article. The assertion of the state of the art of disclosing social responsibility aspects of companies’ insolvency as a case of CSR and the search of answers to the question if the protection of pension and wage benefits in case of corporate insolvency is considered as one of the components of CSR was the third aspect discovered in the article. This aspect may be the basis for further study and practical implementation of disclosure requirements in non-financial reports and combined financial statements.
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Stupp, Diego Rafael, Leonardo Flach, and Luísa Karam de Mattos. "Analysis of the impact of adopting international accounting standards in predicting the insolvency of businesses listed on the BM&FBovespa brazilian stock exchange." RACE - Revista de Administração, Contabilidade e Economia 17, no. 2 (August 28, 2018): 397–422. http://dx.doi.org/10.18593/race.v17i2.16094.
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Abstract: The financial statements of Brazilian companies have been transformed with the adoption of international accounting standards, and it was expected that this would offer more reliable information for decision-making. This study aims to analyze the influence of the adoption of international accounting standards in predicting corporate insolvency. The sample comprises 94 Brazilian companies listed on BM&FBovespa, divided into two groups: the first group has companies considered insolvent and the second group has solvent companies. For each insolvent company we selected another enterprise of the same segment, based on the nearest value of the total assets. The collected data comprised the period of 31 December 2004 to 31 December 2013. The explanatory variables include 29 financial indicators and the methodological procedure was the statistical method called Discriminant Analysis. The application of statistical tests on separate samples in periods before and after the adoption of IFRS, led to the conclusion that there was a considerable improvement in predicting insolvency after the adoption of international accounting standards, because the average accuracy increased from 73.5% to 82.1%.Keywords: Insolvency forecast. Financial indicators. International accounting standards.Análise do impacto da adoção das normas internacionais de contabilidade na previsão de insolvência de empresas listadas na BM&FBovespaResumo: As demonstrações contábeis das empresas brasileiras foram revolucionadas com a adoção das normas internacionais de contabilidade e espera-se que tragam informações mais confiáveis para a tomada de decisão. O objetivo com este trabalho foi analisar a influência da adoção das normas internacionais de contabilidade na previsão de insolvência empresarial. A amostra compreende 94 empresas brasileiras listadas na BM&FBovespa, divididas em dois grupos: um com empresas consideradas insolventes e outro com as empresas solventes. Para cada empresa insolvente foi selecionada outra do mesmo segmento, com o valor do ativo mais próximo. Os dados coletados abrangem o período de 31 de dezembro de 2004 a 31 de dezembro de 2013. As variáveis explicativas compreendem 29 indicadores contábeis e o método aplicado baseia-se no método estatístico de Análise Discriminante. A aplicação de testes estatísticos em amostras separadas em períodos anteriores e posteriores à adoção das IFRS permitiu verificar que houve uma melhoria considerável na previsão de insolvência após a adoção das normas internacionais de contabilidade, pois a média de acerto aumentou de 73,5% para 82,1%.Palavras-chave: Previsão de insolvência. Indicadores contábeis. Normas internacionais de contabilidade.
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Giacosa, Elisa, Estela Halili, Alberto Mazzoleni, Claudio Teodori, and Monica Veneziani. "Re-estimation of company insolvency prediction models: Survey on Italian manufacturing companies." Corporate Ownership and Control 14, no. 1 (2016): 159–74. http://dx.doi.org/10.22495/cocv14i1c1p1.
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The global research stems from the relevance of the global economic crisis. The research has several objectives: 1) to test the degree of effectiveness of the insolvency prediction models, most widely used in the literature, including recent works (Jackson and Wood, 2013), with reference to Italian manufacturing companies; 2) to modify the insolvency prediction models selected with the aim of identifying a company insolvency “alert model” which can be used by the various stakeholders; 3) to compare the effectiveness of the re-estimated models vis-à-vis the original ones. The following models were used, selected according to their diffusion and the statistical technique used: 1) Discriminant analysis: - Altman (1983), - Taffler (1983); 2) Logit Analysis: - Ohlson (1980). The study was carried out on a population of Italian companies (27,982 non-failed and 478 failed) with financial statements available for the years 2007-2012. It emerged that, the overall error of the original models, using the original cut-off points, is significant. The error is reduced for cut-off points different from those identified by the original authors. Furthermore, the new re-estimated models have an improved or identical effectiveness vis-à-vis the original models. In particular, the Ohlson re-estimated model is the one that improves most compared to the original model; however, the effectiveness of the Ohlson re-estimated model is lower than the Altman re-estimated model.
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Boratyńska, Katarzyna. "Corporate bankruptcy and survival on the market: lessons from evolutionary economics." Oeconomia Copernicana 7, no. 1 (March 31, 2016): 107. http://dx.doi.org/10.12775/oec.2016.008.
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The following paper is a theoretical and empirical study. The terminological differences between bankruptcy and insolvency have been indicated and compared in the article. Most frequently considered aspects of bankruptcy appear in definitions. The first of them emphasizes the economic character of bankruptcy. Insolvency is a culmination of a lack of financial means and the loss of solvency, which does not have a fading tendency, but develops into a permanent phenomenon. In legal terms, insolvency is an institution, whose purpose is to stop the accumulation of debts and most frequently it consists on the liquidation of the debtor's estate. The main purpose of the study is a critical review of the scientific achievements of the representatives of evolutionary economics within the scope and mechanism of bankruptcy and the survival of enterprises. The analyzed case of the Beta company, which went bankrupt, indicates that the companies which are not able to undertake proper adjustments to competitive conditions of the market at the right moment are eliminated from it. The theoretical law “the survival of the fittest” finds then its reflection in practice. The following research methods were used in the article: a descriptive analysis and the trajectories of J. Argenti in terms of models. Detailed examinations of files of insolvency proceedings of the Beta company have been carried out.
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Keay, Andrew. "Wrongful trading and the liability of company directors: a theoretical perspective." Legal Studies 25, no. 3 (September 2005): 431–61. http://dx.doi.org/10.1111/j.1748-121x.2005.tb00678.x.
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When a company enters insolvent liquidation, the liquidator might take proceedings, under s 214 of the Insolvency Act 1986, against one or more of the company's directors on the basis that the director(s) engaged in wrongful trading. If found liable, a director might be ordered by a court to contribute to the assets of the company. This article examines whether subjecting directors to liability for wrongful trading is theoretically justifiable. After briefly explaining the origin, aims, rationale and operation of s 214, the article then rehearses and evaluates the arguments propounded by several scholars against any justification for a provision in the mould of s 214. Next the article investigates some of the reasons given for supporting the provision. Following this some consideration is given to whether it is possible to opt out of s 214, and, if not, whether this should be permitted. It is concluded, inter alia, that while s 214 is not representative of good regulation, some form of prohibition against wrongful trading can be justified on theoretical grounds.
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Dec, Pawel, and Piotr Masiukiewicz. "Models of Bankruptcy Procedures in European Union." Business and Management Horizons 3, no. 2 (December 1, 2016): 46. http://dx.doi.org/10.5296/bmh.v4i2.10275.
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This paper focuses on the analysis of comparative models bankruptcy in selected EU countries and the evaluation of the effectiveness of the insolvency proceedings. These models are quite similar in the countries concerned; also they give the opportunity to the many variants of the bankruptcy procedure. The main thesis of the article is—so far developed and applied models of bankruptcy are still insufficient and need to be improved and reorientation to a greater extent, particularly concerning the taking into account of weak signals from the business environment. The authors analyzed the relevant theories of the firm and its reference to bankruptcy, presented various models of insolvency procedures in selected EU member states, analyzed the so-called European Company for bankruptcy. Complementing the paper detailed research on the effectiveness of insolvency proceedings in many countries. Included in the text of the conclusions show the shortage of both in theory and in practice, a comprehensive solution to the problem of insolvency proceedings.
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Wardrop, Ann. "Systemic Privatizations and the Failure to ‘Shrink the State’: The Regulation of Insolvent Essential Services in the United Kingdom and Australia." Common Law World Review 34, no. 4 (November 2005): 336–62. http://dx.doi.org/10.1350/clwr.2005.34.4.336.
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Utilizing Feigenbaum, Henig and Hammett's typology, privatizations in the UK and Australia may be described as ‘systemic’ in the sense that their aim has been in part to ‘shrink the state’. Privatizations of essential services such as water, rail and energy in both countries appear to have failed in this endeavour. One example of this failure in the UK is the proliferation of special administration regimes which are initiated by the state and regulate the resolution of essential service insolvency. The recent introduction of an energy administration procedure in the Energy Act 2004 (UK) is yet another example of this process. Regulation of infrastructure insolvency appears on its face to have taken a different course in Australia, relying, for the most part on the usual insolvency regimes. However, the utilization of a contractual model for state oversight in the case of railway company insolvency and the willingness of the state to intervene in the financial distress of electricity generators suggest the Australian approach has also resulted in maintenance of the state's role following privatization. This paper reviews the experience of the State of Victoria in the failure of a rail company and electricity generator and considers to what extent the non-statutory processes utilized by the state reflects its continuing role post privatization. In so doing, the paper evaluates the device of the UK special administration regime and in particular discusses the energy administration provisions of the Energy Act 2004 (UK).
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Scacun, Natalia, and Irina Voronova. "EVALUATION OF ENTERPRISE SURVIVAL: CASE OF LATVIAN ENTERPRISES." Business, Management and Education 16 (July 13, 2018): 13–26. http://dx.doi.org/10.3846/bme.2018.2482.
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Authors study the nature of insolvency both from the legal point of view and scientist position as well as updating tendencies of an insolvency of enterprises in recent years. The subject of the study has been selected company’s survival potential that is analyzed with financial ratio analysis using bankruptcy prediction models. Considering research results, authors identify models that are applicable to a particular industry. Authors put primary metal industry (NACE 24) for the study. The aim of the paper is to investigate the survival potential of enterprises by testing existing parametric models of insolvency forecasting and assessing their potential for use in the economic conditions of Latvia. During the investigation has been reviewed the concept of the financially healthy company and its relation with the main success development factors.
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Jensen, Anthony. "Saving companies worth saving: Spain pioneers a sustainable model of democratic corporate governance." Economic and Industrial Democracy 32, no. 4 (February 22, 2011): 697–720. http://dx.doi.org/10.1177/0143831x10394881.
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The cyclical nature of capitalism reflected in the current economic crises encourages a review of the economic downturn of the 1970s and 1980s in Europe where workers engaged in sit-ins, work-ins and worker buyouts to save their jobs. Hundreds were successful and thousands of jobs were saved. Spain was at the forefront of this strategy and introduced legislation in 1986 to enshrine the worker self-managed company, Sociedades Laborales, as a policy for corporate restructuring. This article reports on the research in Spain conducted into company failure due to insolvency and the subsequent rescue by an employee-centred equity buyout. Seven firms in the metals industry are examined where workers rescued insolvent factories using the Sociedades Laborales democratic model. The research shows that sustainable democratic corporate governance was possible based on worker self-management and this was achieved by the workers making choices to overcome the conundrum of balancing democratic governance and market efficiency.
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Kausar, Dr Hina. "Personal Liability Of Director Of A Company In Insolvency & Investor Frauds Cases." Turkish Journal of Computer and Mathematics Education (TURCOMAT) 12, no. 5 (April 11, 2021): 1531–37. http://dx.doi.org/10.17762/turcomat.v12i5.2120.
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The present paper contributes to the understanding of impact of corporate scams and scandals and understanding the reason how these frauds and white-collar crimes impact the investors trust and business environment as a whole. When these scams occur the trust of investors break with each and every turnout. The impact of such corporate scams is not limited to the company where it took place but to each and every business, be it big corporate units or it be some small-scale businesses by directly impacting the stock exchange where the shares are listed. The authors have also tried to focus upon the issues and problems faced by the investors of the company while the company got involved in corporate scams and to figure out the responsible person of the company who will be held accountable in such kind of cases. The present study is limited to the extent of personal liability of a Director and too specifically in the cases of fraud and insolvency. White collar crimes are everywhere these days and that need to be treated as a growing branch of the Criminal law in India. With increase in the Globalization companies are growing and along with it the stakeholders of the company are also growing, any scam done will step back the investors to invest again and more in the company. Thereby with increase in the market share of a company the director of the Company has to establish an internal mechanism to tackle various white -collar crimes nurtured and how these are dealt in the court of law.
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Seo, Jeong. "부실계열회사 지원에 대한 이사의 책임." Commercial Law Review 35, no. 3 (November 30, 2016): 141–78. http://dx.doi.org/10.21188/clr.35.3.5.
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Ellice, Sebastian. "Is Voluntary Administration Failing Companies? An Investigation into the Operation of Voluntary Administration in New Zealand from Inception to 2019." Victoria University of Wellington Law Review 52, no. 1 (June 27, 2021): 29–58. http://dx.doi.org/10.26686/vuwlr.v52i1.6844.
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This article investigates the operation of voluntary administration in New Zealand from inception in 2007 to 2019. Voluntary administration is a formal insolvency procedure that is intended to maximise an insolvent company's chances of rehabilitation. Research undertaken for this article suggests that voluntary administration is not operating as was intended. It appears to have been underused and largely ineffective as a business rehabilitation mechanism. This article suggests that contributing reasons for the findings of the research include cost barriers for small businesses, a lack of confidence on behalf of creditors, and a misuse of voluntary administration by company directors. It proposes that useful reforms would be to reduce cost barriers and place limitations on when and how the procedure can be used.
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VLADIMIROVNA, Kalinina T., Vasilchuk E. VASILIEVNA, Kurmangaliyeva A. KASYMBEKOVNA, Baizakov S. BAIZAKOVICH, Lysenko Y. VALENTINOVNA, Lysenko M. VALENTINOVICH, and Belokonov Y. VLADIMIROVICH. "Methodological approaches to the development of a digital model for analysis and evaluation of insolvency of joint-stock machine companies." Espacios 42, no. 10 (May 30, 2021): 146–56. http://dx.doi.org/10.48082/espacios-a21v42n10p10.
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In this article, the application of the policy for managing the risk of insolvency is relevant, methodological approaches to the development of a digital model for analyzing and assessing the risk of insolvency are considered, which is focused on the universal concept of liquidity management for a machine-building company, taking into account the following algorithm: the principle of effective management of the structure of working capital; the principle of efficient use of financial resources; the principle of restoring solvency; the principle of effective management of borrowed funds and the principle of effective use of labor resources.
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de Weijs, R. J. "Secured credit and partial priority: Corporate finance as a creation or an externalisation practice?" European Property Law Journal 7, no. 1 (May 3, 2018): 63–101. http://dx.doi.org/10.1515/eplj-2018-0004.
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AbstractFour developments warrant revisiting the debate on full priority and taking steps to implement a partial priority system. The first development is that secured credit increasingly results in a complete lack of funds to cover the expenses of the insolvency procedure. The second development is that secured credit is often not doing what the proponents of full priority argue that it is doing, namely facilitating growth. Instead, it is increasingly used to simply facilitate the leverage of the company without any intent to invest in the company. Thirdly, the plight of unsecured creditor is deteriorating in new ways. Trade creditors in particular are increasingly forced into the position of being suppliers of credit, turning non-adjusting creditors into what can be referred to as adjustable creditors. The fourth development is that these trade creditors find insolvency laws increasingly working against them instead of for them.
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Seo, Jeong-Bum, Sang-Hyo Lee, and Jae-Jun Kim. "Analysis of Correlation between Construction Business and Insolvency of Construction Company." Korean Journal of Construction Engineering and Management 14, no. 3 (May 31, 2013): 3–11. http://dx.doi.org/10.6106/kjcem.2013.14.3.003.
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Yeowart, Geoffrey. "Encouraging company rescue: what changes are required to UK insolvency law?" Law and Financial Markets Review 3, no. 6 (November 2009): 517–31. http://dx.doi.org/10.1080/17521440.2009.11428086.
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Lee, Sanghyo, Sungho Tae, Seungkyu Yoo, and Sungwoo Shin. "Impact of Business Portfolio Diversification on Construction Company Insolvency in Korea." Journal of Management in Engineering 32, no. 3 (May 2016): 05016003. http://dx.doi.org/10.1061/(asce)me.1943-5479.0000413.
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Radić, Irena. "The phoenix is rising again." Zbornik radova Pravnog fakulteta Nis 59, no. 88 (2020): 247–69. http://dx.doi.org/10.5937/zrpfn0-27406.
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The separation of company assets from the assets of its shareholders and the limited liability of company shareholders are two fundamental principles of company law. The principle of limited liability places a "corporate veil" betweeen the company and its shareholders, protecting them from personal responsibility for corporate obligations. It also enables investors to limit their exposure to potential loss to their actual investment in company and to shift the risk of corporate insolvency to the business's creditors. By creating incentives for business ventures, the"corporate veil" of limited liability principle is beneficial to corporate shareholders and the society in general. However, it also opens the door for different kinds of abuses, one of which is embodied in the emergence of "phoenix" companies. A "phoenix" company is usually defined as a new company that arises from the ashes of its failed predcessor, taking over its assets and continuing its business, usually under the same or similar name, and with the same (de facto or de iure) controllers. The phenomenon of "phoenixism" encompasses a range of activities, some of which are legitimate and lawful means of saving the business in financial distress, while others are illegal and constitute an abuse of the corporate limited liability form and the abuse of insolvency and tax law; there are also different shades of grey inbetween the two. The aim of this paper is to describe the conceptual framework of "phoenix" companies, present the main indicators for detecting their activities, and categorise the various types of phoenix activity, with the aim of distinguishing between the harmful and beneficial "phoenixing".
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Casper, Matthias. "Liability of the Managing Director and the Shareholder in the GmbH (Private Limited Company) in Crisis." German Law Journal 9, no. 9 (September 1, 2008): 1125–40. http://dx.doi.org/10.1017/s2071832200000353.
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The insolvency of a company does not arrive suddenly. Normally, insolvency precedes a crisis. At present, the term “crisis” is defined in § 32 a sec. 1 of the Gesetz betreffend die Gesellschaften mit Beschränkter Haftung (GmbHG – Private Limited Companies Act) as the point when the company does not receive any credits according to the usual conditions in the particular market and when the shareholders provide the company with further shareholder capital instead of debt capital. Besides the rules governing shareholder capital substitution, which will be omitted due to the upcoming reform of private limited companies, there are few legal guidelines that regulate the standards of conduct for managing directors and shareholders in the case of a crisis. In particular, § 49 sec. 3 GmbHG needs to be singled out. This paragraph establishes an obligation to call a shareholder meeting if more than half of the capital stock is lost. If an adverse balance arises because of the payouts to the shareholders, the protections of §§ 30, 31 GmbHG will intervene. An adverse balance results when there is insufficient capital to cover the liabilities, ownership's equity, and guaranteed capital. However these protections often do not suffice.
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Nwafor, Anthony O. "The goal(s) of corporate rescue in company law: A comparative analysis." Corporate Board role duties and composition 13, no. 2 (2017): 20–31. http://dx.doi.org/10.22495/cbv13i2art2.
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The concept of corporate rescue lays emphasis on corporate sustainability than liquidation. This trend in corporate legislation which featured in the United Kingdom Insolvency Act of 1986, Australian Corporations Act 2001, Indian Sick Industrial Companies (Special Provisions) Act of 1985 (as replaced by Companies Act, 2013 and supplanted by the Insolvency and Bankruptcy Code, 2016) has been adopted in the South African Companies Act of 2008. The goal(s) of corporate rescue in some of these jurisdictions are not clearly defined. The paper examines, through a comparative analysis, the relevant statutory provisions in the United Kingdom, India, Australia and South Africa and the attendant judicial interpretations of those provisions with a view to discovering the goal(s) of corporate rescue in those jurisdictions. It is argued that while under the United Kingdom and Australian statutory provisions, the administrator could pursue alternative goals of either rescuing the company or achieving better results for the creditors; the South African and Indian statutory provisions do not provide such alternatives. The seeming ancillary purpose of crafting a fair deal for the stakeholders under the South African Companies Act’s provision is not sustainable if the company as an entity cannot be rescued.
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George, Jasper Vikas. "Insolvency Resolution Plans: Right of Erstwhile Management, Corporate Debtor." Journal of National Law University Delhi 6, no. 1 (June 2019): 39–49. http://dx.doi.org/10.1177/2277401719851646.
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As the law under the Insolvency and Bankruptcy Code, 2016 progresses, many anomalies have surfaced which revolve around the resolution plans, which are meant for the survival of the corporate debtor. The National Company Law Appellate Tribunal recently held that it is permissible in law to give the opportunity to ‘resolution applicants’ for revising their offer before final approval.1 Resolution plans play a key role in the corporate insolvency resolution process; therefore, the objectives of the author in the present article is, first, to analyse the importance of resolution plans, second, to examine the law regarding resolution plans in the Insolvency Code and, in the end, to analyse whether there is any necessity to maintain secrecy in reference to ‘resolution plans’ or whether giving a copy of the resolution plans to the corporate debtor will actually help the corporate debtor in getting necessary information for the health of their business for its benefit.
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Md. Ali, Azham. "1MDB: The Financial Accounting’s Question of Going Concern." Journal of Public Administration and Governance 4, no. 4 (January 17, 2016): 142. http://dx.doi.org/10.5296/jpag.v5i4.8884.
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It was only in the second quarter of 2015 that the authorities had admitted that the 1Malaysia Development Berhad (1MDB) was a company experiencing financial distress. But it appeared that the company had began to suffer from insolvency as early as the last quarter of 2014 when it began to fail to make timely payments on both assets purchased and debts overdue. It also seemed that the company had succeeded in hiding its going concern question with the repeated acts of revaluation of some of its assets over the years. Without such revaluations, the company would have shown significant losses in its income statements for many years leading to the picture that it was in fact a company in financial distress.
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Vasilchenko, Daniil D. "Conclusion and Performance of a Corporate Agreement in Company Insolvency (Bankruptcy) Cases." Jurist 10 (October 3, 2018): 57–63. http://dx.doi.org/10.18572/1812-3929-2018-10-57-63.
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Hare, Christopher. "BANKER’S LIABILITY FOR POST-PETITION DISPOSITIONS." Cambridge Law Journal 60, no. 3 (November 21, 2001): 441–92. http://dx.doi.org/10.1017/s0008197301301198.
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Once a petition to wind-up a company has been presented, a balance must be struck between two competing interests. On the one hand, the allegedly insolvent company must be allowed to continue trading until the court has had an opportunity to examine the bien-fondé of the petition; on the other hand, the company’s directors must be prevented from dealing with the corporate assets in a way detrimental to the interests of the general creditors. This balance is struck by the Insolvency Act 1986, s. 127, which provides that, upon the granting of a winding-up order, any “dispositions” of the company’s property in the period following the presentation of the petition are retrospectively avoided, unless the court orders otherwise. The courts have, however, had considerable difficulty in applying this provision to the post-petition operation of a company’s current account and, in particular, have failed to adopt a consistent approach to the potential liability of a bank for continuing to operate such an account. The Court of Appeal addressed this problem in Hollicourt (Contracts) Ltd. v. Bank of Ireland [2001] 2 W.L.R. 290.
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Ali, Rehmat. "International Insolvency Regimes and Rescue Measures Particularly with Reference to the USA and the UK." Journal of Law & Social Studies 2, no. 1 (June 30, 2020): 26–33. http://dx.doi.org/10.52279/jlss.02.01.2633.
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The court has since the dawn of modern company law enjoyed the jurisdiction to order the liquidation of a solvent company. Now radical change has been introduced in the world, in the field of winding up of the companies since the incorporation of the companies in the world. Different jurisdictions like USA in shape of Chapter 11 of bankruptcy code 1978, UK in shape of scheme of arrangements, workout plan etc., South Africa in shape of appointing Judicial Management and Australia in shape of Official Manager have developed various set of rules and regulations dealing with insolvency and other liquidations problem, when company is subject to financial distress, and also alternative corporate rescue mechanism to deal with the corporate disputes of similar nature between management of the companies and others. In this modern corporate world the investor would choose the place where he has more opportunities and protection to his capital. Favorable substantive and procedural law and rules which are sympathetic towards redress of his corporate dispute are the requirement of an investor. Insolvency jurisdictions of UK and USA are more favorable to the foreign investors because there is a sophisticated and more adequate procedural advantage. This paper also aims, inter alia, to analyze the new techniques prevalent in various jurisdictions of the USA and The UK.
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Couwenberg, Oscar, and Grietje T. de Jong. "Redeeming Art. 13 of the European Insolvency Regulation." European Journal of Comparative Law and Governance 1, no. 1 (March 10, 2014): 58–74. http://dx.doi.org/10.1163/22134514-00101008.
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This contribution focuses on the interaction between three phenomena: corporate restructuring, choice of law, and transaction avoidance. In this context, scholars have criticised Art. 13 of the European Insolvency Regulation for providing a possibility for forum shopping. This article enables firms to declare the law of the eu Member State where the provisions on transaction avoidance allow for the most freedom to take restructuring measures applicable to contracts. Literature on company restructuring shows that a combination of restructuring measures – usually additional credit for additional conditions and/or collateral - helps companies overcome financial distress. We argue that rules on transaction avoidance should take this balance into account when voidance is demanded. Using the example of Dutch and German rules on transaction avoidance, we argue that the German rules are more accommodative than the Dutch rules. Therefore, firms may benefit using the German rules on transaction avoidance rather than the Dutch rules.
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Wheeler, Sally. "Directors’ disqualification: insolvency practitioners and the decision-making process." Legal Studies 15, no. 2 (July 1995): 283–305. http://dx.doi.org/10.1111/j.1748-121x.1995.tb00063.x.
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The Company Directors Disqualification Act 1986 (CDDA) instituted, inter alia, a mechanism whereby directors of failed companies can be disqualified from holding office in the future as the result of an application to the court by the Secretary of State, or in the case of compulsory liquidators, the official receive and a subsequent finding by the court that the director is unfit. The operation and effect of the CDDA has been the subject of speculation in the national press, other media and comment from insolvency practitioners since its inception. Most of this comment has focused on the role of the DTI and on its perceived failure to take steps to disqualify directors in sufficient numbers.