International Insolvency Review最新文献

The business model of crypto custodians is relatively new. If these companies fall into financial distress, the question arises as to which legal framework is applicable to them. Since jurisdictions such as the US, the Swiss, the German, and recently also the European Union place crypto custodians under financial supervision, it seems reasonable to assume that the numerous European legal acts for these firms and the recovery and resolution of credit institutions, investment firms and other firms may be relevant (SRMR, BRRD, MiFID II, CRR, MiCAR etc). On the other hand, crypto custodians could be coherently located in the system of European insolvency law. However, the EIR Recast contains an exclusion for certain companies in the financial sector. Having now seen major crypto custodians in financial distress, legal scholars must answer the question of whether one of the legal frameworks is applicable to crypto custodians or whether the European legislature must extend the scope of one of the regimes to include crypto custodians. The study will show that the business model of pure crypto custodians holding crypto currencies in custody is not covered by major European regulations and directives concerning the financial sector but can be covered by the EIR Recast through a narrow interpretation of its scope exclusion. Taking the European legislator's perspective, the paper demonstrates that neither the CRR, SRMR, nor BRRD will lead to coherent results with respect to crypto custodians in financial distress but instead, though unintentional, the application of the EIR Recast. Concerning crypto custodians, the EIR Recast, therefore, seems to be the more suitable regime.

The March 2023 bank failures of Silicon Valley Bank, Signature, and Credit Suisse, which caused turmoil in financial markets and led to regulatory and central bank intervention, revived the debate about the effectiveness of the bank crisis management, resolution, and deposit insurance legal framework established after the Global Financial Crisis. Although the March 2023 events did not escalate into a full-blown financial crisis, they drew attention to certain areas of the current framework, where improvements may be needed. These areas include the need for financial regulation and supervision to focus more on small- and medium-sized banks as potential sources of systemic market events; to review the adequacy of the current deposit insurance regime and the treatment of uninsured deposits; and to provide more clarity about the order of creditor claims in case of bank resolution/insolvency. This article reviews the events of March 2023 and the key lessons from these events and discusses how these lessons could shape the frameworks for bank crisis management and resolution in India and the European Union. The two jurisdictions are in the process of updating their laws in this area, and the March 2023 events could influence the relevant decisions.

Hybrid restructuring procedures, such as pre-packs, have been encouraged to deal with an expected increase in insolvent firms in the aftermath of the COVID-19 pandemic. Pre-packs have been gaining popularity as a restructuring mechanism across the world. India too introduced a pre-packaged insolvency resolution process for micro, small and medium enterprises (MSMEs) in April 2021. This article first provides a brief overview of the pre-pack models employed in certain other jurisdictions such as the United States of America, United Kingdom and Singapore with a view to understanding the key features of pre-pack models and how they have been operationalised in these jurisdictions. It then briefly discusses other restructuring avenues, that were available to a corporate debtor in India, and the circumstances that led up to the introduction of pre-packs in India. Finally, it provides a detailed overview of the Indian pre-pack regime and evaluates its effectiveness for MSMEs, potential issues that may cause delays in the process and how the current pre-pack regime can be further streamlined. It argues that some of the procedural requirements and features of the Indian pre-pack regime may not be suitable for MSME insolvencies.

The conversation about how artificial intelligence (AI) might affect various areas of law (and other areas of life) has, in recent months, centred around ChatGPT which is just one application of AI. This article takes a broader view and assesses how AI, and technology more broadly, has begun to transform, and will continue to transform corporate insolvency law. While the pandemic has increased the adoption of technology in corporate insolvency processes, there is scope for further transformation. This article aims to survey the technological changes to corporate insolvency law and practice thus far and assess, based on current advances in technology, the potential for further transformation. It advances the argument that technology can improve efficiencies both prior to and during formal insolvency resolution processes. It therefore would be in the interests of every country to facilitate the adoption of technology at various points in the insolvency process. The article takes a cross-jurisdictional approach to identify tech advances in insolvency law across different countries based on which best practices and guidelines can be outlined.

In advanced jurisdictions, the choice of a non-consensual debt restructuring is between a public or a private gatekeeper model where either the court or the licensed insolvency professional respectively approves a restructuring plan that binds dissenting creditors. In the United States, the only gateway is found in Chapter 11 of the Bankruptcy Code 1978, which requires court approval and gives the debtor a significant say in the outcome. In contrast, in the United Kingdom, there exist four gateways, only two of which require court approval (scheme of arrangement and restructuring plan), while the remaining two (administration and company voluntary arrangement) give significant powers to the insolvency practitioner to decide on the outcome. In emerging jurisdictions such as Mainland China and India, due to path dependency and lack of institutional capacity, the court-supervised model is chosen as the only or primary gateway to legitimise non-consensual restructurings though the insolvency practitioner has an important statutory role. Using the two jurisdictions as case studies, this article argues that such a choice has several initial benefits but also leads to several problems, including delays in the restructuring, does not necessarily improve substantive outcomes and does not adequately address the shareholder–creditor and creditor–creditor agency costs. This article proposes that for debt restructuring that involves the sale of the business as a going concern, the private gatekeeper should be able to decide on the sale and the distributions following pre-bankruptcy entitlements. Recourse to the court as a public gatekeeper should only be used for reorganisation proceedings.