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Andrew Brown

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Andrew Brown

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Philip Arestis, Andrew Brown and Malcolm Sawyer

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Philip Arestis, Andrew Brown and Malcolm Sawyer

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Philip Arestis, Andrew Brown and Malcolm Sawyer

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The Euro

Evolution and Prospects

Philip Arestis, Andrew Brown and Malcolm Sawyer

The authors offer a sustained argument that the single currency as currently implemented does not promise to deliver prolonged growth. They contend that the economic impact of the euro, and its accompanying institutions, is likely to be destabilising and deflationary; that the political impact is profoundly undemocratic and that the social consequences are likely to be deleterious. They do not reject the concept of a single currency but are highly critical of policy arrangements such as the Stability and Growth Pact which govern the euro. The authors propose alternative policy and institutional arrangements within which the euro should be embedded. They demonstrate that these would have the benefits of a single currency whilst avoiding many of the potential costs identified by detractors.
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European Insolvency Law

Reform and Harmonization

Gerard McCormack, Andrew Keay and Sarah Brown

Critically analysing the substantive law of insolvency in the EU countries as a whole, this book carries out horizontal cross-cutting analysis of the data gathered from a study of national insolvency laws. It selects particular areas for detailed discussion and considers the pros and cons of particular legislative solutions.
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Gerard McCormack, Andrew Keay and Sarah Brown

Chapter 1 deals with Directors’ liability and disqualification imposed when their company ends up in insolvency. Liability can take various forms across Member States. In some Member States, the duties that directors owe when their company is solvent shift in nature when their company is near to being insolvent or actually insolvent and if directors do not fulfil their duties they can be held liable for breach of duty. In the vast majority of other states, directors are held liable if they do not file for insolvency proceedings within a prescribed period from the point where they know or ought to know that their company is insolvent. In some states, directors may be liable if they do not take action to stop their company’s slide into insolvency or act to prevent its insolvent position worsening. The liability of directors could be civil and/or criminal. There are a number of obstacles to bringing proceedings against miscreant directors. From the data obtained the following are the most frequent: the directors are impecunious and not worth pursuing; proceedings are costly; and the time delay in getting a hearing of proceedings can be substantial. There is some opinion, but far from unanimous, that the difference in approach in Member States can lead to significant problems. All but a couple of Member States have some form of disqualification process for directors and it is generally seen as an important element in the monitoring and control of directors. The approach taken to disqualification differs across the EU, and is reflected in the time periods prescribed for disqualification, the reasons for making a disqualification order and whether there are other consequences, besides disqualification from acting as a director, emanating from the handing down of an order of disqualification. A problem that exists with breaches of duties and disqualification is that neither are clearly seen as fitting within either company law or insolvency law where the directors’ company is in financial difficulty and ends up subject to insolvency proceedings, so they are matters that can ‘fall between the cracks’ as there is confusion in knowing how they should be addressed.
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Gerard McCormack, Andrew Keay and Sarah Brown

Chapter 2 deals with the Institutional framework. This framework is crucial in the operation of a properly functioning insolvency system. The chapter considers in particular the role played by insolvency practitioners (IPs). The IP has a central role in the effective and efficient implementation of insolvency law, including certain powers over debtors and their assets, with a duty to protect the value of those assets, as well as the interests of creditors and other stakeholders, and to ensure impartial application of the law. The IP is the link between the court, creditors and the debtor. It is fundamentally important that IPs are appropriately qualified and display appropriate standards of competence, expertise, integrity and professionalism in the conduct of the proceedings. The study has shown that qualification and licensing standards vary considerably across EU countries but because of the principle of mutual recognition of insolvency proceedings in the Regulation on Insolvency Proceedings 1346/2000 and recast Insolvency Regulation 2015/848, the issue of incompetent or poorly qualified IPs in one Member State has potential ramifications in other Member States. A number of international and European standard setting bodies have worked on a set of principles laying down parameters for the qualifications and training of IPs and formulating guidelines for the performance of their functions. While sometimes formulated at a high level of generality, there is a considerable degree of commonality about the nature of these standards and guidelines. It may be that the European Commission could leverage the work of these other organizations with a view to formulating a common European framework.
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Gerard McCormack, Andrew Keay and Sarah Brown

Chapter 3 concerns the Ranking of claims and order of priorities. Recital 22 of the Preamble to the recast Insolvency Regulation acknowledges the fact that ‘as a result of widely differing substantive laws it is not practical to introduce insolvency proceedings with universal scope throughout the Union’. This study has indeed revealed very different approaches in Member States on the priorities enjoyed by the holders of security interests (secured creditors) and preferential (priority) claimants in an insolvency. This may cause creditors to assess credit risk by reference to individual countries rather than on a Europe-wide basis, though undoubtedly, a number of other factors enter into the assessment of credit risk and not just the insolvency or collateral law in a particular country. The chapter considers a number of issues, including the relatively poor position of EU countries on the ‘getting credit’ indicator of the World Bank Doing Business Project. It asks whether this is down primarily to the way in which these rankings are composed rather than due to any fundamental deficiencies in the relevant laws and practices of EU Member States. The chapter highlights a number of matters that may be appropriate for consideration by the European legislator, although some of them may be rather controversial with difficulties in securing agreement. These include: • whether a minimum set of EU rules on the ranking of claims in the event of insolvency might impact favourably on the availability and cost of credit in some or all EU Member States; • whether claims by unpaid employees should be given any special status at EU level; • whether the financial position of employees might be more appropriately protected by enhancing the protections available under employment law Directives and, in particular, by strengthening national wage guarantee funds and other employee safeguarding measures; • whether the protections should be extended to self-employed persons and how might self-employed persons be defined for this purpose; • whether special rules are appropriate giving ‘new money’ advanced during the course of, or in anticipation of, restructuring and/or liquidation proceedings priority over other creditors.