AbstractA popular perception is that administrative receivers and their appointors hold 'too much' power in relation to troubled companies. Consideration of this issue is timely, because insolvency law is currently under review. We argue although the law's formal structure is imbalanced, this can nevertheless generate savings for parties by allowing a concentrated creditor who has invested in information-gathering about the debtor to conduct a private insolvency procedure. We suggest that this procedure is likely to be more efficient than one conducted by a state official, and that it facilitates debt-based governance, a matter of particular importance for small and medium-sized businesses.
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Bibliographic InfoPaper provided by ESRC Centre for Business Research in its series ESRC Centre for Business Research - Working Papers with number wp159.
Date of creation: Mar 2000
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Web page: http://www.cbr.cam.ac.uk/
Banks; Corporate Insolvency; Debt Governance; Secured Credit;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-04-15 (All new papers)
- NEP-ENT-2002-04-03 (Entrepreneurship)
- NEP-LAW-2002-04-15 (Law & Economics)
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