Under longstanding Supreme Court precedent, the Bankruptcy Code constrains bankruptcy courts’ equitable powers. At the same time, bankruptcy courts have often used their equitable powers in ways that go beyond the Code’s text. This conflict between precedent and practice creates tensions between various bankruptcy goals. The Code provides ex ante certainty and contains substantive policy choices, which equity threatens to compromise by allowing bankruptcy judges to override the text. Yet without equity, bankruptcy proceedings would provide parties with occasions to gain positional advantages in bankruptcy, thereby allowing them to unilaterally capture value at those other parties’ expense. Drawing on insights from equity theory, this Essay identifies a role that equity can play to balance these interests. This Essay proposes an “equity canon” for bankruptcy courts to use when interpreting the Bankruptcy Code. The equity canon calls for judges to interpret unclear provisions by disregarding interpretations that would lead to inequitable outcomes. Recent developments in equity theory have illuminated equity’s role in combating opportunistic evasions of the law that cannot be identified and prevented ex ante. This is particularly important in bankruptcy. While bankruptcy proceedings are designed to maximize the estate’s value, parties nonetheless have incentives to capture value for themselves. Bankruptcy courts can therefore use the equity canon to combat parties’ opportunistic exploitation of the Bankruptcy Code while respecting the primacy of the Bankruptcy Code.
{"title":"Bankruptcy's Equity Canon","authors":"Jared Mayer","doi":"10.2139/ssrn.3900027","DOIUrl":"https://doi.org/10.2139/ssrn.3900027","url":null,"abstract":"Under longstanding Supreme Court precedent, the Bankruptcy Code constrains bankruptcy courts’ equitable powers. At the same time, bankruptcy courts have often used their equitable powers in ways that go beyond the Code’s text. This conflict between precedent and practice creates tensions between various bankruptcy goals. The Code provides ex ante certainty and contains substantive policy choices, which equity threatens to compromise by allowing bankruptcy judges to override the text. Yet without equity, bankruptcy proceedings would provide parties with occasions to gain positional advantages in bankruptcy, thereby allowing them to unilaterally capture value at those other parties’ expense. Drawing on insights from equity theory, this Essay identifies a role that equity can play to balance these interests. This Essay proposes an “equity canon” for bankruptcy courts to use when interpreting the Bankruptcy Code. The equity canon calls for judges to interpret unclear provisions by disregarding interpretations that would lead to inequitable outcomes. Recent developments in equity theory have illuminated equity’s role in combating opportunistic evasions of the law that cannot be identified and prevented ex ante. This is particularly important in bankruptcy. While bankruptcy proceedings are designed to maximize the estate’s value, parties nonetheless have incentives to capture value for themselves. Bankruptcy courts can therefore use the equity canon to combat parties’ opportunistic exploitation of the Bankruptcy Code while respecting the primacy of the Bankruptcy Code.","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"120 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127585276","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The overarching objective of the Insolvency and Bankruptcy Code, 2016 (IBC) is to foster rescue culture in India and facilitate the reorganization, restoration and resolution of the corporate debtor rather than its liquidation. However, liquidation has been the most prevalent outcome so far for corporate debtors who have entered into the insolvency resolution process. The liquidation process under the IBC entails an orderly distribution of sale proceeds of the liquidation estate or the unsold assets of the corporate debtor where each creditor receives a proportionate amount of their claims based on their place in the distribution hierarchy of the liquidation process. A creditor’s ability to set off a debt by-passes this orderly scheme of distribution and allows the creditor exercising the set off to be preferred over others to the extent of the set off value. Despite this manifestation of the right to set off, it is preserved in the insolvency and bankruptcy regimes of the US and the UK, the latter making it mandatory. India recognized set offs under insolvency law prior to the enactment of the IBC. After the IBC’s enactment, an indebted creditor’s right to set off during the insolvency resolution process has become ambiguous. The IBC’s protective moratorium during the insolvency resolution process has been used to deny indebted creditors of their ability to exercise set offs against the corporate debtor. This paper analyses the evolution in the Indian position on insolvency set offs and compares it with the treatment of set offs in the UK and the US. The paper finds that set offs are not inherently antithetical to insolvency law and that they can be embraced by the IBC.
{"title":"Insolvency Set Offs in India: A Comparative Perspective","authors":"M. R. Ram Mohan, Vishakha Raj","doi":"10.2139/ssrn.3864014","DOIUrl":"https://doi.org/10.2139/ssrn.3864014","url":null,"abstract":"The overarching objective of the Insolvency and Bankruptcy Code, 2016 (IBC) is to foster rescue culture in India and facilitate the reorganization, restoration and resolution of the corporate debtor rather than its liquidation. However, liquidation has been the most prevalent outcome so far for corporate debtors who have entered into the insolvency resolution process. The liquidation process under the IBC entails an orderly distribution of sale proceeds of the liquidation estate or the unsold assets of the corporate debtor where each creditor receives a proportionate amount of their claims based on their place in the distribution hierarchy of the liquidation process. A creditor’s ability to set off a debt by-passes this orderly scheme of distribution and allows the creditor exercising the set off to be preferred over others to the extent of the set off value. Despite this manifestation of the right to set off, it is preserved in the insolvency and bankruptcy regimes of the US and the UK, the latter making it mandatory. India recognized set offs under insolvency law prior to the enactment of the IBC. After the IBC’s enactment, an indebted creditor’s right to set off during the insolvency resolution process has become ambiguous. The IBC’s protective moratorium during the insolvency resolution process has been used to deny indebted creditors of their ability to exercise set offs against the corporate debtor. This paper analyses the evolution in the Indian position on insolvency set offs and compares it with the treatment of set offs in the UK and the US. The paper finds that set offs are not inherently antithetical to insolvency law and that they can be embraced by the IBC.","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-06-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132502845","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Farming is inherently risky. America’s smaller family farmers operate subject to the hazards of weather, the markets, and changes in government policies. Any one of these factors alone may wreak financial havoc on farms, especially those operating with razor-thin margins and teetering on the brink of insolvency. But when these factors combine, as they have in recent history, they threaten to decimate America’s smaller farming operations, which comprise 90 percent of farms in the United States.
Chapter 12 of the U.S. Bankruptcy Code provides a solution for this special category of honest but unfortunate debtors. Congress created Chapter 12 as a temporary, emergency response to the 1980s farm crisis and made it permanent in 2005. It is a restructuring tool designed to “give [family] farmers a fighting chance to reorganize their debts and to keep their land” through a repayment plan confirmed by the bankurptcy court.
Among the requirements for plan confirmation is a feasibility test. Feasibility is bankruptcy law’s shorthand for the court’s assessment of the probability of actual performance of the debtor’s proposed plan. The test requires bankruptcy courts to consider and weigh objective evidence in the record about whether Chapter 12 debtors realistically can achieve their reorganization plans while accounting for the risks inherent in farming. An affirmative feasibility determination is a bankruptcy court’s calculated prediction about the continued financial viability of the farm.
This paper qualitatively examines the feasibility requirement and provides insight about formulating feasible Chapter 12 plans. Plan feasibility is commonly litigated in Chapter 12. When bankruptcy courts resolve feasibility disputes, they make key findings about the ability of Chapter 12 debtors to perform their proposed plans. These findings, when viewed in the aggregate, provide debtors and their attorneys guidance for structuring feasible plans and navigating feasibility challenges.
{"title":"Betting on Farms: Feasible Chapter 12 Plans","authors":"A. Sickler","doi":"10.2139/ssrn.3789028","DOIUrl":"https://doi.org/10.2139/ssrn.3789028","url":null,"abstract":"Farming is inherently risky. America’s smaller family farmers operate subject to the hazards of weather, the markets, and changes in government policies. Any one of these factors alone may wreak financial havoc on farms, especially those operating with razor-thin margins and teetering on the brink of insolvency. But when these factors combine, as they have in recent history, they threaten to decimate America’s smaller farming operations, which comprise 90 percent of farms in the United States. <br><br>Chapter 12 of the U.S. Bankruptcy Code provides a solution for this special category of honest but unfortunate debtors. Congress created Chapter 12 as a temporary, emergency response to the 1980s farm crisis and made it permanent in 2005. It is a restructuring tool designed to “give [family] farmers a fighting chance to reorganize their debts and to keep their land” through a repayment plan confirmed by the bankurptcy court.<br><br>Among the requirements for plan confirmation is a feasibility test. Feasibility is bankruptcy law’s shorthand for the court’s assessment of the probability of actual performance of the debtor’s proposed plan. The test requires bankruptcy courts to consider and weigh objective evidence in the record about whether Chapter 12 debtors realistically can achieve their reorganization plans while accounting for the risks inherent in farming. An affirmative feasibility determination is a bankruptcy court’s calculated prediction about the continued financial viability of the farm. <br><br>This paper qualitatively examines the feasibility requirement and provides insight about formulating feasible Chapter 12 plans. Plan feasibility is commonly litigated in Chapter 12. When bankruptcy courts resolve feasibility disputes, they make key findings about the ability of Chapter 12 debtors to perform their proposed plans. These findings, when viewed in the aggregate, provide debtors and their attorneys guidance for structuring feasible plans and navigating feasibility challenges. <br>","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-01-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129801724","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In 1933, Parliament enacted the corporate restructuring statute which has become Canada’s premier reorganization regime for large companies: The Companies’ Creditors Arrangement Act (“CCAA”). Initially, the CCAA provoked controversy among the commercial bar because it bound secured claims, subjecting provincial property rights to federal bankruptcy and insolvency law for the first time. To resolve uncertainty about the validity of the new Act, the Bennett Government referred a constitutional question to the Supreme Court of Canada, which upheld the CCAA as a valid bankruptcy and insolvency statute. This historical study brings to light the fact that the property rights issue – despite being the most powerful argument against the validity of the CCAA – was not made by the litigants, nor addressed in the Supreme Court of Canada’s decision. It argues that the CCAA reference was a landmark case because it affirmed the ability of bankruptcy and insolvency law to qualify property rights and in so doing construed this federal head of power in relation to the debtor’s financial condition. This dramatically expanded the scope of the federal bankruptcy and insolvency law power at the expense of provincial jurisdiction. It also facilitated the addition of secured creditor remedies such as restructuring and receivership to bankruptcy and insolvency statutes.
{"title":"The Companies' Creditors Arrangement Act Reference Case, 1934","authors":"Virginia Torrie","doi":"10.2139/ssrn.3736343","DOIUrl":"https://doi.org/10.2139/ssrn.3736343","url":null,"abstract":"In 1933, Parliament enacted the corporate restructuring statute which has become Canada’s premier reorganization regime for large companies: The Companies’ Creditors Arrangement Act (“CCAA”). Initially, the CCAA provoked controversy among the commercial bar because it bound secured claims, subjecting provincial property rights to federal bankruptcy and insolvency law for the first time. To resolve uncertainty about the validity of the new Act, the Bennett Government referred a constitutional question to the Supreme Court of Canada, which upheld the CCAA as a valid bankruptcy and insolvency statute. This historical study brings to light the fact that the property rights issue – despite being the most powerful argument against the validity of the CCAA – was not made by the litigants, nor addressed in the Supreme Court of Canada’s decision. It argues that the CCAA reference was a landmark case because it affirmed the ability of bankruptcy and insolvency law to qualify property rights and in so doing construed this federal head of power in relation to the debtor’s financial condition. This dramatically expanded the scope of the federal bankruptcy and insolvency law power at the expense of provincial jurisdiction. It also facilitated the addition of secured creditor remedies such as restructuring and receivership to bankruptcy and insolvency statutes.","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134344507","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Bankruptcy Code is the primary source of bankruptcy relief for debtors in the United States. But it is not the only source. Over the years, Congress has occasionally created bespoke bankruptcy – customized debt relief designed for a particular group of debtors. Bespoke bankruptcy may provide desperately-needed bankruptcy relief to entities that are ineligible or otherwise unable to access bankruptcy through the Bankruptcy Code. But bespoke bankruptcy is also fraught with difficulties. To what extent should bespoke bankruptcy be used or developed instead of the Bankruptcy Code?
This Article takes up this question. It begins by acknowledging the limitations of the Bankruptcy Code and highlighting instances where Code-based bankruptcy relief does not work. It then introduces the concept of bespoke bankruptcy and devises a framework that policymakers can use to decide when and how to implement it. In so doing, the Article sets the stage for a new direction in bankruptcy law: one where bespoke bankruptcy performs a limited, but critical, role in providing relief to entities that the Bankruptcy Code does not or cannot assist.
{"title":"Bespoke Bankruptcy","authors":"L. Coordes","doi":"10.2139/ssrn.3723646","DOIUrl":"https://doi.org/10.2139/ssrn.3723646","url":null,"abstract":"The Bankruptcy Code is the primary source of bankruptcy relief for debtors in the United States. But it is not the only source. Over the years, Congress has occasionally created bespoke bankruptcy – customized debt relief designed for a particular group of debtors. Bespoke bankruptcy may provide desperately-needed bankruptcy relief to entities that are ineligible or otherwise unable to access bankruptcy through the Bankruptcy Code. But bespoke bankruptcy is also fraught with difficulties. To what extent should bespoke bankruptcy be used or developed instead of the Bankruptcy Code?<br><br>This Article takes up this question. It begins by acknowledging the limitations of the Bankruptcy Code and highlighting instances where Code-based bankruptcy relief does not work. It then introduces the concept of bespoke bankruptcy and devises a framework that policymakers can use to decide when and how to implement it. In so doing, the Article sets the stage for a new direction in bankruptcy law: one where bespoke bankruptcy performs a limited, but critical, role in providing relief to entities that the Bankruptcy Code does not or cannot assist.<br>","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125370082","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In theory, governments could protect against the potential economic devastation of future pandemics by requiring businesses to insure against pandemic-related risks. In practice, though, insurers do not currently offer pandemic insurance. Even assuming companies could obtain sufficient statistical data to reliably set pandemic underwriting standards and rate tables, the insurance industry is concerned that it lacks sufficient capacity to cover those risks, which are likely to occur worldwide and be highly correlated. Pandemics therefore are in the class of risks, like nuclear accidents, war, and terrorism, that are sometimes defined as “uninsurable,” at least by private markets. This Article focuses on using risk securitization—a relatively recent and innovative private-sector alternative to government insurance, funded by the issuance of catastrophe (“CAT”) bonds—to insure pandemic-related risks. Risk securitization would utilize the “deep pockets” of the global capital markets, which have a far greater capacity than the global insurance markets, to absorb these risks. The Article also examines how risk securitization could supplement public-private catastrophe insurance schemes, such as Chubb’s recent pandemic-coverage plan, to reduce the government’s shared exposure.
{"title":"Insuring the 'Uninsurable': Catastrophe Bonds, Pandemics, and Risk Securitization","authors":"S. Schwarcz","doi":"10.2139/ssrn.3712534","DOIUrl":"https://doi.org/10.2139/ssrn.3712534","url":null,"abstract":"In theory, governments could protect against the potential economic devastation of future pandemics by requiring businesses to insure against pandemic-related risks. In practice, though, insurers do not currently offer pandemic insurance. Even assuming companies could obtain sufficient statistical data to reliably set pandemic underwriting standards and rate tables, the insurance industry is concerned that it lacks sufficient capacity to cover those risks, which are likely to occur worldwide and be highly correlated. Pandemics therefore are in the class of risks, like nuclear accidents, war, and terrorism, that are sometimes defined as “uninsurable,” at least by private markets. This Article focuses on using risk securitization—a relatively recent and innovative private-sector alternative to government insurance, funded by the issuance of catastrophe (“CAT”) bonds—to insure pandemic-related risks. Risk securitization would utilize the “deep pockets” of the global capital markets, which have a far greater capacity than the global insurance markets, to absorb these risks. The Article also examines how risk securitization could supplement public-private catastrophe insurance schemes, such as Chubb’s recent pandemic-coverage plan, to reduce the government’s shared exposure.","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"305 4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121156192","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In December 2019, the Insolvency and Bankruptcy Board of India (IBBI) notified provisions for insolvencies of personal guarantors to corporate debtors under that country’s Insolvency and Bankruptcy Code, thereby putting those provisions into force. The IBBI has released regulations for cases involving guarantors and has indicated that it is moving toward notification of the provisions of the Code for other personal debtors. While the Code and regulations for personal guarantors set out a broad framework for the personal insolvency regime, it is still unclear whether there will be limits, requirements, or guidance for various aspects of repayment plans that debtors must propose in insolvency. This article, forthcoming in the Insolvency and Bankruptcy Board of India's publication, "The Evolving Insolvency and Bankruptcy Regime in India: A Narrative," proposes that repayment plans and other aspects of the insolvency process should be standardized enough to ensure a baseline treatment of both debtors and creditors, subject to some flexibility for unique or exceptional circumstances. While a generally negotiated process may be appropriate for commercial debtors under the Code, there are good reasons to believe that the process for personal debtors should be significantly more rule-bound. If the basic design of repayment plans can be specified, it might be best to dispense with the need for creditors to vote to approve plans, except perhaps to approve plans with more generous relief to debtors, and the Board or the adjudicating authorities might also adopt an approach to ‘fast-track’ debtors to bankruptcy who are unlikely to be able to repay any significant amount to creditors in insolvency.
{"title":"Designing a Personal Insolvency Regime: A Baseline Framework for India’s Insolvency and Bankruptcy Code","authors":"A. Feibelman, R. Sane","doi":"10.2139/ssrn.3675810","DOIUrl":"https://doi.org/10.2139/ssrn.3675810","url":null,"abstract":"In December 2019, the Insolvency and Bankruptcy Board of India (IBBI) notified provisions for insolvencies of personal guarantors to corporate debtors under that country’s Insolvency and Bankruptcy Code, thereby putting those provisions into force. The IBBI has released regulations for cases involving guarantors and has indicated that it is moving toward notification of the provisions of the Code for other personal debtors. While the Code and regulations for personal guarantors set out a broad framework for the personal insolvency regime, it is still unclear whether there will be limits, requirements, or guidance for various aspects of repayment plans that debtors must propose in insolvency. \u0000 \u0000This article, forthcoming in the Insolvency and Bankruptcy Board of India's publication, \"The Evolving Insolvency and Bankruptcy Regime in India: A Narrative,\" proposes that repayment plans and other aspects of the insolvency process should be standardized enough to ensure a baseline treatment of both debtors and creditors, subject to some flexibility for unique or exceptional circumstances. While a generally negotiated process may be appropriate for commercial debtors under the Code, there are good reasons to believe that the process for personal debtors should be significantly more rule-bound. If the basic design of repayment plans can be specified, it might be best to dispense with the need for creditors to vote to approve plans, except perhaps to approve plans with more generous relief to debtors, and the Board or the adjudicating authorities might also adopt an approach to ‘fast-track’ debtors to bankruptcy who are unlikely to be able to repay any significant amount to creditors in insolvency.","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-08-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125232680","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The effects of the COVID-19 crisis have driven many listed Australian companies to raise emergency capital. These share issues have been facilitated by a relaxation of the rules applying to capital raising by the Australian Securities Exchange, a move supported by the Australian Securities and Investments Commission. The reforms to the rules draw on the experience of the financial crisis in 2008 - 2009. They are designed to assist companies adversely affected by the COVID-19 crisis to raise capital to survive the crisis. The nature of the reforms and the capital raisings to which they relate have been the subject of competing concerns. In particular, the enhanced disclosure requirements that have accompanied the relaxation of the capital raising rules have been criticised by some as unwarranted and by others as insufficient. In this research note, the authors provide information on the number of capital raisings since the beginning of COVID-19 and evaluate the competing arguments regarding the recent capital raising reforms.
新冠肺炎危机的影响促使许多澳大利亚上市公司筹集应急资金。澳大利亚证券交易所(Australian Securities Exchange)放宽了适用于融资的规则，为这些股票发行提供了便利，此举得到了澳大利亚证券和投资委员会(Australian Securities and Investments Commission)的支持。这些规则改革借鉴了2008年至2009年金融危机的经验。它们旨在帮助受COVID-19危机不利影响的公司筹集资金以渡过危机。改革的性质以及与之相关的融资活动，一直是各方相互关注的主题。特别是，一些人批评，在放松融资规则的同时，加强了披露要求，这是没有根据的，另一些人则批评这是不够的。在本研究报告中，作者提供了自COVID-19开始以来融资数量的信息，并评估了有关最近融资改革的相互竞争的论点。
{"title":"Capital Raising by Companies During the COVID-19 Crisis: An Analysis of Recent ASX Reforms","authors":"Lloyd Freeburn, I. Ramsay","doi":"10.2139/ssrn.3683703","DOIUrl":"https://doi.org/10.2139/ssrn.3683703","url":null,"abstract":"The effects of the COVID-19 crisis have driven many listed Australian companies to raise emergency capital. These share issues have been facilitated by a relaxation of the rules applying to capital raising by the Australian Securities Exchange, a move supported by the Australian Securities and Investments Commission. The reforms to the rules draw on the experience of the financial crisis in 2008 - 2009. They are designed to assist companies adversely affected by the COVID-19 crisis to raise capital to survive the crisis. The nature of the reforms and the capital raisings to which they relate have been the subject of competing concerns. In particular, the enhanced disclosure requirements that have accompanied the relaxation of the capital raising rules have been criticised by some as unwarranted and by others as insufficient. In this research note, the authors provide information on the number of capital raisings since the beginning of COVID-19 and evaluate the competing arguments regarding the recent capital raising reforms.","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128137191","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
[Revised version as of June 20, 2020] Article 11 of the EU Directive on restructuring and insolvency provides for a cross-class cram-down mechanism. When implementing the instrument, EU Member States may choose between an ‘absolute priority rule’ (APR) and an EU specific ‘relative priority rule’ (EU RPR) as a condition for the use of cram-down powers. The EU RPR is characterized mainly by the fact that it offers more flexibility in the negotiation of restructuring plans. So far, not enough attention has been paid to the fact that the European legislator has also introduced a novel and upgraded ‘best interest of creditors’ test (EU BIT) as part of the mechanism. This article explores the interaction of the EU RPR and the EU BIT from both a theoretical and practical standpoint. It concludes that, through its interaction with the EU BIT, the EU RPR does in theory not lead to the drastic consequences often described. A properly interpreted EU BIT absorbs large ‘distortions’ in the allocation of reorganization value. However, this article points out problems that could arise in practice. The fact that under an EU RPR/EU BIT cross-class cram-down two hypothetical values mark out the realm in which the EU RPR operates, and the priority rule itself lacks a clear guideline for entitlement, gives cause for concern that the praised flexibility would come at the expense of plan negotiability and plan acceptance.
{"title":"Rethinking Priority: The Dawn of the Relative Priority Rule and a New ‘Best Interest of Creditors’ Test in the European Union","authors":"Axel Krohn","doi":"10.2139/ssrn.3554349","DOIUrl":"https://doi.org/10.2139/ssrn.3554349","url":null,"abstract":"[Revised version as of June 20, 2020] \u0000 \u0000Article 11 of the EU Directive on restructuring and insolvency provides for a cross-class cram-down mechanism. When implementing the instrument, EU Member States may choose between an ‘absolute priority rule’ (APR) and an EU specific ‘relative priority rule’ (EU RPR) as a condition for the use of cram-down powers. The EU RPR is characterized mainly by the fact that it offers more flexibility in the negotiation of restructuring plans. So far, not enough attention has been paid to the fact that the European legislator has also introduced a novel and upgraded ‘best interest of creditors’ test (EU BIT) as part of the mechanism. This article explores the interaction of the EU RPR and the EU BIT from both a theoretical and practical standpoint. It concludes that, through its interaction with the EU BIT, the EU RPR does in theory not lead to the drastic consequences often described. A properly interpreted EU BIT absorbs large ‘distortions’ in the allocation of reorganization value. However, this article points out problems that could arise in practice. The fact that under an EU RPR/EU BIT cross-class cram-down two hypothetical values mark out the realm in which the EU RPR operates, and the priority rule itself lacks a clear guideline for entitlement, gives cause for concern that the praised flexibility would come at the expense of plan negotiability and plan acceptance.","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"34 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123920512","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
An effective corporate restructuring law should be transparent, efficient and certain. These three goals are very important as the absence of one might impede the restructuring process. An important tool for restructuring is financing. This paper discusses DIP Financing in Canada in light of the recent amendments to the Companies' Creditors Arrangement Act.
{"title":"DIP Financing in Canada in Light of the Recent Amendments to the CCAA","authors":"Chioma Adiele","doi":"10.2139/ssrn.3734784","DOIUrl":"https://doi.org/10.2139/ssrn.3734784","url":null,"abstract":"An effective corporate restructuring law should be transparent, efficient and certain. These three goals are very important as the absence of one might impede the restructuring process. An important tool for restructuring is financing. This paper discusses DIP Financing in Canada in light of the recent amendments to the Companies' Creditors Arrangement Act.","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"53 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-04-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128206710","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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