Conventional economic reasoning suggests that formal insolvency proceedings should commence once the greater of the going concern value or the liquidation value of a firm falls below the value of its liabilities. Since this test is difficult to apply in practice, an additional cash flow test is...

The European Commission has proposed a directive on ‘preventive restructuring frameworks' for financially distressed firms. I demonstrate that the proposal is flawed because it creates a refuge for failing firms that should be liquidated, because it rules out going concern sales for viable...

This chapter deals with fundamental issues of corporate insolvency law. Particular attention is paid to the agency problems related to “bankruptcy governance” and how these are addressed in various jurisdictions. Methodologically, the chapter is based on a functional approach that compares...

Insolvency proceedings and issues relating to personal and business insolvencies are the daily subject of scholarly work and insolvency practice. But what is an insolvency proceeding? And why is this an important question? This article deals with a specific regulatory problem that is raised by...

COVID-19 has severely disrupted the conduct of business around the globe. In jurisdictions that impose one or more ‘lockdowns', multiple sectors of the real economy must endure prolonged periods of reduced trading or even total shutdowns. The associated revenue losses will push many businesses...

Two events are currently changing the landscape for business restructurings in the European Union: the “Restructuring Recommendation” (RR) of the European Commission, issued in 2014, and the 2015 recast of the European Insolvency Regulation (EIR). In this paper, we critically review the RR...