Law Commons^™

Modular Bankruptcy: Toward A Consumer Scheme Of Arrangement, John A. E. Pottow

Law & Economics Working Papers

The world of international bankruptcy has seen increasing use of the versatile scheme of arrangement, a form of corporate reorganization available under English law. A key feature of the scheme is its modularity, whereby a debtor can restructure only a single class of debt, such as bond indentures, without affecting other debt, such as trade. This is the opposite of chapter 11 of the U.S. Bankruptcy Code’s comprehensive reckoning of all financial stakeholders. This article considers a novel idea: could the scheme be transplanted into the consumer realm? It argues that it could and should. Substantial benefits of more individually …

Aligning Nigeria’S Companies And Allied Matters Act With Restructuring Objectives: A Comparative Analysis Using Key Areas Of Interest In Canada’S Insolvency Regime, Unyime Anieti Akpan

Master of Laws Research Papers Repository

Despite the commendable inclusion of restructuring options in Nigeria’s Companies and Allied Matters Act 2020 (“CAMA 2020”), there are still some issues to be addressed in order to fully align CAMA’s restructuring regimes with its goals. This paper undertakes a comparative analysis of the CAMA and the relevant Canadian laws in this respect (particularly the Companies’ Creditors Arrangement Act (“CCAA”) which are aimed at restructuring insolvent corporations. Given the broad nature of a general comparison of insolvency regimes, the approach of this research will be to highlight some key areas of interest under both the CAMA …

The Roles Of The Creditor And Debtor In The Settlement Process Of The Debtor's Financial Obligations Under The Debtor's Insolvency Law No. 19 Of 2019, Pierre Mallet Dr.

مجلة جامعة الإمارات للبحوث القانونية UAEU LAW JOURNAL

The UAE Cabinet approved a federal law to regulate cases of insolvency of natural persons or individuals. In 2016, the UAE government had adopted a similar insolvency law for companies which was widely welcomed by businesses and financial institutions. The legal framework for insolvency for both companies and individuals are expected to improve the competitiveness and the ease of doing business of the UAE. Debt restructuring for individuals under legal protection is widely seen as a great step forward in helping those who are unable to pay their debts from going bankrupt. “The approval of a new federal law to …

Enforceability Of Third-Party Releases In Foreign Proceedings Under Chapter 15, Anastasia Greer

Bankruptcy Research Library

(Excerpt)

In our increasingly globalized world, cross-border insolvency proceedings brought under chapter 15 (herein "Chapter 15") of title 11 of the United States Code (the "Bankruptcy Code") are on the rise - with over 100 additional filings in 2020 alone. Third-party releases are provisions in bankruptcy plans intended to release non-debtors (including shareholders, directors, officers, and affiliates) from claims creditors hold against other members of their class. A third­ party release can "act as a complete release, waiver, and discharge of that party ... arising out of or in connection with the debtor and its plan of reorganization." While the …

Reverse Vesting Orders – Developing Principles And Guardrails To Inform Judicial Decisions, Janis P. Sarra

All Faculty Publications

Reverse vesting orders (RVO) are a new tool being used by insolvency practitioners in Canada’s Companies’ Creditors Arrangement Act (CCAA) and other insolvency proceedings, where the debtor is not required to propose a restructuring plan and creditors are not permitted a vote on the going-forward strategy. The article starts from the premise that the court has authority to approve an RVO pursuant to sections 11 and 36 of the CCAA and the court’s general authority under the statute. However, it suggests that there must be exceptional circumstances for the court to be persuaded to bypass provisions of insolvency legislation aimed …

Medicare "Bankruptcy", Matthew B. Lawrence

Faculty Articles

Medicare, the social insurance program for the elderly and disabled, is once again facing insolvency. Spending from the program’s hospital insurance trust fund is predicted to exceed the accumulated payroll taxes and other revenues that support the fund within the next five years, leaving Medicare unable to honor some of its obligations. Yet, what happens if and when Medicare becomes insolvent has not previously been explored in legal scholarship and is not addressed in statute or regulation. This Article confronts for the first time the major legal questions that Medicare insolvency would present. It explains what policymakers could do to …

Perlindungan Dana Float Berdasarkan Peraturan Bank Indonesia Tentang Uang Elektronik Untuk Memitigasi Risiko Insolvency Penerbit Uang Elektronik, Rizky Kartika Sari

"Dharmasisya” Jurnal Program Magister Hukum FHUI

Bank Indonesia regulations governing all aspects related to float funds are basically carried out in the framework of carrying out the task of regulating and maintaining a smooth payment system. Float funds must be guaranteed security in terms of liquidity risk, credit risk, legal risk, and operational risk. A strict and comprehensive arrangement regarding float funds is based on the consideration that electronic money issuers should always manage float funds safely and govern so that can minimize liquidity risk considering that basically electronic money issuers are exposed to liquidity risk and insolvency risk. However, at present, there is no regulation …

Building A Restructuring Hub: Lessons From Singapore, Aurelio Gurrea-Martinez

Research Collection Yong Pung How School Of Law

This article analyses the legal, market and institutional features needed to become an international hub for debt restructuring. For that purpose, it explores the strategy followed by Singapore, as well as the market and institutional factors generally found in other leading centres for legal and financial services such as the United States, the United Kingdom and Hong Kong. In jurisdictions traditionally having creditor-oriented insolvency systems, such as the United Kingdom, Hong Kong and Singapore, one of the primary challenges for the improvement of the restructuring framework for debtors consists of making sure that the insolvency system remains protective of the …

Implementing An Insolvency Framework For Micro And Small Firms, Aurelio Gurrea-Martinez

Research Collection Yong Pung How School Of Law

Micro-, small-, and medium-sized enterprises (MSMEs) represent the vast majority of businesses in most countries around the world. Despite the economic relevance of these firms, most insolvency jurisdictions do not provide adequate responses to MSMEs. Moreover, with a few exceptions, the academic literature on insolvency law has not traditionally focused on the treatment of MSMEs in insolvency. This article seeks to contribute to the debate by exploring the primary features and problems of MSMEs in insolvency as well as the weaknesses of the ordinary insolvency framework to deal with MSMEs. It also provides a general overview of the primary reforms …

Insolvency Law In Emerging Markets, Aurelio Gurrea-Martinez

Research Collection Yong Pung How School Of Law

A well-functioning corporate insolvency system can serve as a valuable tool to promote entrepreneurship, innovation, access to finance and economic growth. Therefore, if having an efficient insolvency framework is essential for any country, it becomes even more important for emerging economies due to their potential for growth and their greater financial needs. Unfortunately, the academic literature has generally paid more attention to the regulation of corporate insolvency in developed countries. Thus, with some notable exceptions, it has largely omitted the debate about the optimal design of insolvency law in jurisdictions that, in addition to requiring a more active policy debate, …

The Rise Of Pre-Packs As A Restructuring Tool: Theory, Evidence And Policy, Aurelio Gurrea-Martinez

Research Collection Yong Pung How School Of Law

The use of pre-packs as a restructuring tool has been traditionally popular in the United Kingdom and the United States. In recent years, however, several jurisdictions around the world, including Singapore, India, Spain, the Netherlands, and the Philippines have promoted the use of pre-packs. By shortening the length of insolvency proceedings, pre-packs have the ability to reduce the costs of financial distress, and especially those associated with the loss of reputation, employees, suppliers and goodwill. Thus, pre-packs can help maximise the value of the firm for the benefit of debtors, creditors and society as a whole. However, the conflict of …

The Future Of Insolvency Law In A Post-Pandemic World, Aurelio Gurrea-Martinez

Research Collection Yong Pung How School Of Law

The COVID-19 crisis has encouraged many countries to amend their insolvency laws. In most cases, these amendments took place temporarily – especially during the hibernation phase of the pandemic. In other countries, however, the pandemic has led to permanent changes in the insolvency legislation. More importantly, the COVID-19 crisis has accelerated the insolvency reforms already existing in the political agenda of many countries, and it has encouraged other jurisdictions to reassess the desirability of their insolvency and restructuring frameworks. This article analyzes the current trends, reforms and policy discussions that are expected to reshape the future of insolvency law in …

The Measure Of A Monitor's Role, Alejandro E. Gonzalez

Electronic Thesis and Dissertation Repository

This study examines the monitor, a court-appointed officer under the Companies’ Creditors Arrangement Act, in order to determine whether and how to best secure its independence. Concerns over the role are increasingly over whether it can maintain its supposed impartiality and avoid conflicts of interest. This study centers on its fiduciary duty, long discussed in the courts, as both problematic because it is not conclusively defined, and as the best means of establishing the monitor as a fair and impartial guardian of public confidence in Canadian insolvency law. By examining leading insolvency law theories, international and Canadian insolvency policy, and …

To Stay Or Not To Stay? A Clash Of Arbitration And Insolvency Regimes, Darius Chan, Sidharrth B Rajagopal

Research Collection Yong Pung How School Of Law

In the wake of the global Coronavirus disease 2019 (COVID-19) pandemic, a rise in creditorinitiated winding-up proceedings is likely to be impending in coming years (See e.g., RCMA Asia Pte. Ltd. v. Sun Electric Power Pte. Ltd. [2020] SGHC 205). At the same time, geopolitical developments, such as the scale and ambition of Belt & Road Initiative projects, have raised questions over the issue of debt sustainability. Given the prevalence of arbitration clauses in modern international commercial and project agreements, the interplay and relationship between insolvency and dispute resolution, and especially arbitration, requires careful attention. While the intersections between the …

The Roles Of The Creditor And Debtor In The Settlement Process Of The Debtor's Financial Obligations Under The Debtor's Insolvency Law No. 19 Of 2019, Pierre Mallet

UAEU Law Journal

The UAE Cabinet approved a federal law to regulate cases of insolvency of natural persons or individuals. In 2016, the UAE government had adopted a similar insolvency law for companies which was widely welcomed by businesses and financial institutions. The legal framework for insolvency for both companies and individuals are expected to improve the competitiveness and the ease of doing business of the UAE. Debt restructuring for individuals under legal protection is widely seen as a great step forward in helping those who are unable to pay their debts from going bankrupt. “The approval of a new federal law to …

Singapore’S Special Insolvency Scheme For Small Companies, Vincent Ooi, Aurelio Gurrea-Martinez

Research Collection Yong Pung How School Of Law

In this article, the authors examine a temporary program in Singapore to help micro and small businesses facing insolvency amid the COVID-19 crisis.

Equitable Subordination Redux? Section 183 Of The Bankruptcy And Insolvency Act And Respecting The 'Legislative Will' Of Parliament, Thomas G. W. Telfer

Law Publications

The Supreme Court of Canada has yet to rule on whether the American doctrine of equitable subordination is part of Canadian law. In Re US Steel, the Ontario Court of Appeal suggested in obiter that section 183 of the Bankruptcy and Insolvency Act (BIA) conferred upon courts the power to equitably subordinate a claim. This article focuses on the specific point of whether section 183 of the BIA provides the court jurisdiction in equity to subordinate a claim and alter the statutory priority scheme. Equitable jurisdiction found in section 183 of the BIA does not represent a broad power to …

Bankruptcy For Banks: A Tribute (And Little Plea) To Jay Westbrook, David A. Skeel Jr.

All Faculty Scholarship

In this brief essay, to be included in a book celebrating the work of Jay Westbrook, I begin by surveying Jay’s wide-ranging contributions to bankruptcy scholarship. Jay’s functional analysis has had a profound effect on scholars’ understanding of key issues in domestic bankruptcy law, and Jay has been the leading scholarly figure on cross-border insolvency. After surveying Jay’s influence, I turn to the topic at hand: a proposed reform that would facilitate the use of bankruptcy to resolve the financial distress of large financial institutions. Jay has been a strong critic of this legislation, arguing that financial institutions need to …

The Future Of Reorganization Procedures In The Era Of Pre-Insolvency Law, Aurelio Gurrea-Martinez

Research Collection Yong Pung How School Of Law

Several countries and regions around the world, including Singapore, the United Kingdom, and the European Union, are amending their restructuring framework to implement a pre-insolvency mechanism that includes most of the features that exist in the US Chapter 11 reorganization procedure. However, unlike what happens in the United States, where unsuccessful reorganizations lead to Chapter 7 liquidations, companies using this ‘de facto Chapter 11’ (DFCH11) are still allowed to use formal reorganization procedures. This article argues that, while the rise of the DFCH11 is not necessarily undesirable provided that various protections are put in place, jurisdictions implementing this restructuring tool …

Law And Covid-19, Aurelio Gurrea-Martinez, Yihan Goh, Mark Findlay

Research Collection Yong Pung How School Of Law

This book is a collection of essays from scholars at Singapore Management University School of Law analysing the challenges and implications of COVID-19 from the perspective of different areas of law, including private law, corporate law, insolvency law, data protection, financial laws, public law, privacy law, commercial law, constitutional law, law and technology, and dispute resolution. It also analyses how the COVID-19 pandemic will affect the judicial system, the study of law, and the future of the legal profession. Beyond considerations of the pandemic’s influence on law and legal service delivery the authors consider how law can help facilitate the …

Bank Resolution And Creditor Distribution: The Tension Shaping Global Banking –Part Ii: The Cross-Border Dimension, David Ramos, Javier Solana

University of Miami Business Law Review

New bank resolution frameworks that aim to address the complex task of managing the collapse of a large financial institution stand in considerable tension with basic principles and policy objectives of insolvency law. In this two-part study, we present an analytical framework that aims at helping us understand how this tension can undermine the effectiveness of the new bank resolution frameworks. In the first part of this article, we introduced our three-layered framework and explored its first two layers: the group dimension, and the duality of crisis-prevention and crisis-management tools. In this Part II, we explore the last layer: the …

Bankruptcy For Cannabis Companies: Canada’S Newest Export?, Stephanie Ben-Ishai

University of Miami International and Comparative Law Review

No abstract provided.

The Low Usage Of Bankruptcy Procedures: A Cultural Problem? Lessons From Spain, Aurelio Gurrea-Martínez

University of Miami International and Comparative Law Review

While filing for bankruptcy does not seem appealing for any debtor regardless of the jurisdiction, the reluctance to use the bankruptcy system varies across countries. This article explores the underlying reasons and economic effects of the low usage of bankruptcy procedures in Spain, where the rate of business bankruptcies is one of the lowest in the world. Some authors have argued that the low usage of bankruptcy procedures in Spain is due to a “cultural” problem faced by Spanish entrepreneurs. According to this hypothesis, the lack of a “bankruptcy culture” makes Spanish entrepreneurs afraid to use the bankruptcy system. In …

Value Tracing And Priority In Cross-Border Group Bankruptcies: Solving The Nortel Problem From The Bottom Up, Edward J. Janger, Stephan Madaus

University of Miami International and Comparative Law Review

No abstract provided.

Cryptocurrencies, Cybersecurity And Bankruptcy Law: How Global Issues Are Globalizing National Remedies, Renato Mangano

University of Miami International and Comparative Law Review

The market for cryptocurrencies is interspersed with cases of loss, theft and fraud and a new transnational practice in bankruptcy law is emerging whereby cryptocurrency exchanges compensate the injured users on a collective basis. This paper will argue: first, that this trend has transplanted into Asia and Europe the US idea according to which bankruptcy law can be employed to avoid mass litigation; secondly, that this trend has transcended the debate about the characterization of digital assets, including the concerns of those scholars who maintain that digital coins cannot be objects of property; and thirdly that – since this practice …

Resolving Corporate Insolvencies In China: The Gap Between Law And Reality, Dr. Zhang Zinian

University of Miami International and Comparative Law Review

This article examines how corporate insolvencies in China, the second largest economy, are handled under the current legislation, the China Enterprise Bankruptcy Law of 2006. Relying on the fresh empirical data arising from the first ten years on the use of China’s three insolvency procedures, reorganization, composition and liquidation, this article reveals the huge gap between the law in the books and the law in action, arguing that the implementation of this law in China perhaps has not achieved the legislative objectives. The constitutional and institutional weaknesses affecting the application of this law are analyzed

Small Business And Bankruptcy: Recent Changes In Kosovo And The United States Compared, Bruce A. Markell

University of Miami International and Comparative Law Review

United States, small businesses account for 99.7% of all employers, and about 47.3% of private sector employment.1 In the European Union (EU) non-financial business sector, SMEs accounted for 99.8% of all enterprises.2 These enterprises employed almost ninety-eight million people—66.6% of total employment—in the EU.

SMEs are variously defined. In the United States, until recently the definition of an SME was an enterprise that employed less than 500 individuals.4 In the EU, SMEs are defined as businesses which employ less than 250 staff and have an annual turnover of less than €50 million, or whose balance sheet total is less than …

Impact Of The Italian Business Crisis And Insolvency Code On Organizational Structures In Msmes, Alessandra Zanardo

University of Miami International and Comparative Law Review

In September 2021, the Italian Bankruptcy Law will be replaced by a new comprehensive Act, the so-called Business Crisis and Insolvency Code.

Two topics have immediately become the “mantra” of this important reform: a) the introduction into the domestic legal framework of early warning tools and alert procedures, along the lines of the French experience; and b) the introduction of a specific obligation on the entrepreneur or the management body of collective entities to implement suitable measures or establish appropriate organizational structures to prevent future insolvency and preserve the business continuity.

These measures are closely related, insofar as the obligation …

Singapore's Legal And Economic Response To The Covid-19 Crisis: The Role Of Insolvency Law And Corporate Workouts, Aurelio Gurrea-Martinez, Samuel Loh

Research Collection Yong Pung How School Of Law

The international spread of the coronavirus has forced many countries to put their economies into ‘hibernation’, leading to one of the worst recessions observed in modern times. Since Singapore is not isolated from this crisis, the Government had to intervene by adopting a very ambitious package of legal and financial measures to support businesses, households and employees. Among these measures, the Government has implemented various temporary changes to the insolvency legislation, and the use of out-of-court agreements has been encouraged for debtors facing financial trouble. This article argues that, while insolvency law can play an important role in the current …

The Tax Treatment Of Haircuts In Financial Reorganizations, Aurelio Gurrea-Martinez, Vincent Ooi

Research Collection Yong Pung How School Of Law

Over the past few years, Singapore has implemented various ambitious insolvency reforms aimed at making the country an international hub for debt restructuring. This article argues that while Singapore has put in place one of the most sophisticated restructuring frameworks in the world, some tax reforms might be useful to maximise the potential of this new restructuring framework. Namely, it will be pointed out that the tax treatment of debt forgiveness granted by creditors in corporate reorganisation (‘haircuts’) should be reviewed. Under the current legislation, these haircuts may be treated as taxable income. As a result, financially distressed debtors may …