LIQUIDATION AGAINST OTHER OPTIONS

Insolvency Law: Law-5460M-01 European and International Business Law LLM Student ID: 200437290 Year: 2008/2009 Word count: 4590 (Excluding details above, essay question, footnotes, bibliography) . 'It is best if insolvent companies are liquidated as soon as possible and creditors paid out. Doing anything else with such companies is just not efficient'. Critically discuss this statement. INTRODUCTION-general background-aim of the text In simple terms, insolvency law deals with companies and individuals troubled by debts, which they are incapable of repaying. There may be individual insolvency (bankruptcy) and corporate insolvency. Bankruptcy law developed much earlier than corporate insolvency law, as the formation of companies only started taking place in the 19th century.1 For the purposes of the question, this text will only deal with corporate insolvency. The Joint Stock Companies Act 1844 was the legislation that set the basis for the modern registered company.2 Furthermore, the Winding-up Act 1844 was the first statute enacted to regulate the liquidation or winding-up of the company.3 The Cork Report 1982 was another important modern development of Insolvency law with many recommendations as to the improvement of this area of law.4 With the enactment of the Insolvency Act 19865 the English law dealt with both individual and corporate insolvency in

  • Word count: 6844
  • Level: University Degree
  • Subject: Law
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INTERNATIONAL COPORATE LIQUIDATION

"The nature and scale of business today mean that it is increasingly likely that English companies will enter into transactions with foreign companies and vice versa. This trade may be of great benefit to the companies involved, but the international element to such business may cause enormous problems when one of the companies becomes insolvent. Several jurisdictions may have the right to wind up the companies if, for example, the company had branch offices or carried on business in a number of different states. Therefore the often Herculean task of winding up a company where there are cross border implications is complex, even where English judges are willing to cooperate with foreign liquidators". Dr Kate Dawson (2001 Receivers Administrators and Liquidators Quarterly p 345) Describe and consider the ways in which the Insolvency Act 1986 and the EC Regulation o Insolvency Proceedings 200 provide means of cooperation between English and other jurisdictions in Insolvency Proceedings involving cross border problems. Cooperation in insolvency proceedings has greatly benefited from the insolvency discipline and this has contributed to the development of practices and procedures that allow international insolvency and restructuring proceedings to be coordinated and harmonised. This is more so due to the earlier absence of insolvency treaties and conventions and which led to

  • Word count: 4460
  • Level: University Degree
  • Subject: Law
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Pari-Passu. The parripassu principle has been described as a most fundamental principle of corporate insolvency law which holds that in a winding up, creditors shall share rateably in the common pool

The parri-passu principle has been described as a most fundamental principle of corporate insolvency law which holds that in a winding up, creditors shall share rateably in the common pool of asset available for residual distribution, and receive a share in proportion to the size of their admitted claims. The principle in itself carries certain characteristics namely, that its application as a mandatory rule is largely confined to liquidation; it cannot be excluded by contract1; and can only apply to unencumbered assets of the insolvent company that are available for distribution2. The rationale for the principle has been described in terms of 'efficiency' and 'fairness'. In terms of efficiency, it has been described as creating a conducive forum for the orderly dealing of unsecured creditors' claims within a mandatory collective regime. It has also been seen as an avenue whereby time and legal costs are saved by not having need for the courts to determine various issues that may be encountered with various other alternative principles if used in substitute. This efficiency justification is however only relevant where there is an absence of any legislative direction to distinguish between unsecured claims. Another justification for the principle is its economical efficiency, in the sense that it reduces strategic costs and increases the aggregate pool of assets through

  • Word count: 2269
  • Level: University Degree
  • Subject: Law
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Does the laws concerning directors of insolvent companies strike the right balance of protecting between protecting the public and encouraging entrepreneurship

In order to be able to analyse whether the current law regulating the conduct of directors of companies that are insolvent or near insolvency, strikes the right balance between protecting the public and encouraging entrepreneurship, it will be important to first understand the means by which English insolvency law seeks to regulate the conduct of directors. The current insolvency law which is in form of the Insolvency Act 1986 was the outcome of the radical overhaul of corporate insolvency law with special reference to the need to discourage insolvent trading and to disqualify delinquent directors as a result of the abuse of the principle of limited liability. The methods by which directors' conduct are regulated are by reference to civil and criminal sanctions embodied in various statutory provisions For the purpose of clarity I shall deal with each provision applicable under the Insolvency Act separately. Starting with the improper trading provisions, I will first examine the so-called 'wrongful trading' provision which is now section 214 of the Insolvency Act 1986. Section 214 provides, in effect, that the liquidator of a company that is in insolvent liquidation (effectively the situation where a company's assets are not sufficient to pay its debts at the time of liquidation1) may commence proceedings against the company's directors, and these proceedings may ask that

  • Word count: 1818
  • Level: University Degree
  • Subject: Law
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LIQUIDATION LAW

Introduction: European regulation of insolvency proceeding came into force on 31st of May 2002 and the intention was to made simpler position to reciprocal recognition and the insolvency proceedings enforced within EU. Regulation aims for the issues that occur when insolvency includes a figure of assorted jurisdictions. Though it does not rule among various EU countries or do not go with substantive law. This paper deals with cross border insolvency which may differ in possessions and liabilities situated in two jurisdictions. For the implementation of competent management organization of cross border insolvencies, arrangements of regulation had done within European Communities (EC). The insolvency in UK is synchronized by the Insolvency act 1986.Section 221 deals with powers of the court to wind up any unregistered company and in section 426 of insolvency act 1986 the court should assist courts of relevant states and territories in winding up procedure (Collins 1993). In Europe, there are many problems in foreign insolvency of the companies and keeping these issues in mind European regulation on insolvency 2000 was made. Impact of the European Regulation on Insolvency: This regulation was made in order to inflict framework for well organized management of cross border insolvencies within EU and this consists of two proceedings (a) main proceeding, (b) secondary

  • Word count: 5586
  • Level: University Degree
  • Subject: Law
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