Corporate Rescue Law – An Anglo-American Perspective

Corporate Rescue Law – An Anglo-American Perspective

Corporations, Globalisation and the Law series

Gerard McCormack

This book offers an unprecedented and detailed comparative critique of Anglo-American corporate bankruptcy law. It challenges the standard characterisation that US law in the sphere of corporate bankruptcy is ‘pro-debtor’ and UK law is ‘pro-creditor’, and suggests that the traditional thesis is, at best, a potentially misleading over-simplification. Gerard McCormack offers the conclusion that there is functional convergence in practice, while acknowledging that corporate rescue, as distinct from business rescue, still plays a larger role in the US. The focus is on corporate restructurings with in-depth scrutiny of Chapter 11 of the US Bankruptcy Code and the UK Enterprise Act, and offers other comparative oversights.

Chapter 3: Fundamental Features of the US Chapter 11

Gerard McCormack

Subjects: law - academic, company and insolvency law, corporate law and governance

Extract

2. Corporate restructuring law in the UK INTRODUCTION This chapter looks at the main features of corporate restructuring law in the UK, namely: receiverships, administrations and company voluntary arrangements (CVAs) plus schemes of arrangement under the Companies Act. Attention is principally directed at administration. First however, it is necessary to set the law in context. CONTEXT In the last decade corporate restructuring law in the UK has been radically reshaped – principally by means of the Enterprise Act. The Act must be seen against the backdrop of the stakeholder rhetoric of the ‘New Labour’ government elected in 1997.1 One might argue that the Enterprise Act 2002 aimed at a paradigm shift – to make the UK the best place in the world to do business. The statute can be viewed in the context of the late 1990s economic boom that was fuelled by the technology and Internet sectors.2 At the same time however, the government feared a return of the economic downturn and recession of the 1 For a full theoretical discussion of these issues see Vanessa Finch Corporate Insolvency Law: Perspectives and Principles (Cambridge, Cambridge University Press, 2002) and in particular chapters 8 and 9 and see also Finch ‘Re-Invigorating Corporate Rescue’ [2003] JBL 527. The specialist insolvency journals Insolvency Lawyer, Insolvency Intelligence and Insolvency Law and Practice also contain a wealth of literature on the new administration procedure and practical problems thrown up by the same. 2 See generally on the flavour of the times John Cassidy dot.con (New York,...

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