Insolvency Law: Objective and Justification

This chapter aims to explain the objective of a plan procedure and the justification for the consequent infringement of individual rights of dissenting stakeholders. Chapter 3 will show that a plan procedure is purely an instrument of insolvency law. So, for that reason, this chapter starts off with a discussion of the objective and justification of insolvency law in general. Since the focus of this study is the design of a new legislative instrument, the approach is not based on the current objective of insolvency law in any particular national system. Rather, what should be the broader objective of insolvency law is explained, taking inspiration from the ‘creditors’ bargain theory’ developed in US literature.