This article focuses on the coordination of main and secondary insolvency proceedings in cross-border insolvency cases. The authors analyse how main and secondary insolvency proceedings should be ...coordinated in different aspects of these proceedings, namely: the opening of insolvency proceedings, the exercise of creditors’ rights, and the treatment of the debtor’s assets. The procedural peculiarities of the opening of secondary insolvency proceedings are also discussed. The article also examines how insolvency practitioners and courts in parallel cross-border insolvency proceedings should coordinate their actions to ensure proper response to the debtor’s insolvency problems. Moreover, the authors assess the relevant case law of the Court of Justice of the European Union and whether is compatible with the goal of effective cross-border insolvency proceedings.
This study examines the interaction between insolvency proceedings and strategic variables and their relationship with firm survival. Unlike previous research, this study considers the firm’s legal ...status, including insolvency proceedings, and fills a gap in the literature by considering legal considerations in business studies. Adopting a legitimacy perspective, we employ a Cox proportional hazards model to construct a survival model based on a theoretical framework encompassing insolvency proceedings retrenchment, firm age, and causes of financial distress. Our sample consists of French SMEs facing financial difficulties. The findings reveal that initiating insolvency proceedings is negatively associated with firm survival. However, retrenchment of employees or assets during insolvency proceedings is associated with a higher likelihood of survival. Contrary to expectations, firm age showed a negative association with firm survival during the insolvency proceedings. Moreover, the study revealed a positive association between insolvency proceedings and firm survival in cases of firm-specific financial distress. This research provides new insights into the relationship between insolvency proceedings and firm survival.
European Commission has performed a review of Member States’ insolvency law systems, with the conclusion that there are still several Member States where restructuring is not an option for companies ...facing financial struggles without being insolvent. Furthermore, there are more legal differences regarding regulation in the insolvency area, which has a negative effect for the smooth development and efficient performance of the EU domestic market. As a result, the European Directive on restructuring was introduced with the aim of aligning insolvency law in Member states. One of the goals of the Directive on restructuring is the creation of preventive restructuring systems, but the document does not present a definition of preventive restructuring nor a guideline for the implementation of these systems. This article aims to describe the key features and attributes of the preventive restructuring system and to analyse the conditions of the application of preventive restructuring. In this article, the preventive restructuring system is compared with pre-insolvency and informal restructuring procedures, defining their similarities, differences, and advantages. Lithuania has implemented part of the provisions of the Restructuring Directive by legislating changes in the insolvency law of Legal persons, and a preventive restructuring system was established by a by-law. Based on the conclusions derived in the research regarding the concept and essence of the preventive restructuring system, this article aims to answer the question of whether current legislation will allow the goals of Directive to be achieved, and whether the legislation in Lithuania establishes a proper preventive restructuring system.
This article analyzes the concept of viability and its interpretation in insolvency law in relation to the restructuring of enterprises where creditors provide financial support in order to avoid ...bankruptcy. The significance of viability in insolvency law is assessed, as this concept is regulated by international legal acts regulating insolvency proceedings, i.e. European Union law. The complex nature of viability and the assessment of the economic situation of the company are analyzed. The author also examines the precise meaning of viability when applying the Law on Insolvency of Enterprises of the Republic of Lithuania, and the objectives and economic justification for the establishment of this concept. The author asserts that viability is an economic category, the assessment of which requires not only legal, but also special economic, financial, and market knowledge. Recent case law on the interpretation and application of the viability condition in the restructuring process is analyzed. Moreover, the author suggests which circumstances may prove the non-viability of the enterprise and when bankruptcy proceedings should be commenced.
Full discharge of debts, as an outcome of the insolvency proceeding, should enable an entrepreneur to pursue their economic activity onward. This research analyses the implementation of the European ...Union's discharge of debt standards into Ukrainian legislation. The article focuses on the comparison of the discharge procedures of natural persons (entrepreneurs) between the Code of Ukraine on Bankruptcy Procedures (CUBP) No. 2597-VIII from 18 October 2018 and the Directive (EU) 2019/1023 on restructuring and insolvency from 20 June 2019. As a result, the author observes that the CUBP maintains a different approach to protecting creditors' and debtors' interests in the discharge procedures compared to the Directive (EU) 2019/1023 on restructuring and insolvency. In conclusion, the author proposes approximating Ukrainian legislation to European standards by amending the CUBP.
Insolvency proceedings are strategic for the competitiveness of a national economy. The new law, but also new financial situation of organizations affect the new normal of insolvency framework. In ...Europe, standards aimed at creating an efficient framework for corporate insolvency resolution are constantly changing to enhance the efficiency of such mechanisms. This pursuit contrasts with the lack of specific efficiency data available to both legislators and researchers, there are no solid statistics to investigate the phenomenon from the perspective of its efficiency, which makes it impossible in practice to investigate its explanatory variables. Previous studies have led us to reflect on key information asymmetry and adverse selection problems resulting from a gap between the new challenges on insolvencies processes and options, because the lack of information. Based on this reflection, we have identified parallelisms between the lemon market, and current insolvency proceedings in Spain. Although, the legal system is modified, the insolvency process itself is a drag, for the achievement of the long-awaited efficiency of the process. It will be necessary to change, not only the legislation, but also the information provided, and create a new insolvency system because actual has "lemons signals", this circumstance is producing negative effects on the efficiency and competence of a key figure in the process: the insolvency administrator.
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