- Corporations, Globalisation and the Law series
Chapter 9: Conclusion
8. The restructuring plan There are major differences between US and UK law when it comes to the formulation and acceptance of a restructuring or reorganisation plan for an ailing company. The main differences are threefold and could be summarised as follows. Firstly, in the US, the debtor has an exclusive right to formulate a reorganisation plan for a certain period of time whereas there is no such opportunity in the UK. Secondly, US law is much more prescriptive when it comes to division of creditors into classes. UK law is much less prescriptive in this regard. Thirdly, a class of creditors, including secured creditors in exceptional circumstances can be crammed down in the US, i.e. forced to accept a reorganisation plan against its wishes provided that at least one other class of impaired creditors has accepted the plan. In the UK, there is no facility for cramdown. The point has been made in previous chapters that ‘corporate’ rescue in the UK tends to take the form of business rescue through sale of all or part of the business as a going concern. In the US, more emphasis has traditionally been paid on getting the corporate vehicle back into proper working order, though going concern or asset sales have taken on a greater prominence in recent years. But perhaps because corporate revival is such a significant part of the traditional Chapter 11 landscape, the US reorganisation confirmation provisions appear to have been the subject of much greater debate and discussion...
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