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Corporate Rescue: An Overview of Recent Developments from Selected Countries in Europe

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With the unprecedented explosion of international trade and commerce and its byproduct financial distress, it is evident that we need a legal system to normalize and deal with cross-border insolvencies. Prof. Giuseppe Ragusa Maggiore, editor-in-chief of the Journal of Commercial and Insolvency Law, initially proposed the creation of a specialist forum for the discussion and debate on the direction of insolvency laws of Europe. The consensus of the participants agreed that it would be helpful to establish a forum of professional legal scholars for the exchange of ideas and to consider and analyze the current legal systems of the principal members of the European Union. The first major meeting of this specialized forum was a high-profile international conference organized and held in 2001 at the University of Cosenza in Italy.

 

The best papers submitted at this conference were compiled and published as Corporate Rescue: An Overview of Recent Developments from Selected Countries in Europe, published by Kluwer Law International, an independent publishing house of The Hague, Netherlands. Kluwer has published a truly unique and excellent monograph meeting the highest scientific standards.

Prof. Katarzyna Gromek Broc and Rebecca Parry edited the submissions for the monograph. Prof. Gromek Broc is a lecturer at the University of Hull and was a visiting professor at Golden Gate University in San Francisco and Stetson University College of Law in Gulfport, Fla. Ms. Perry is a senior lecturer at the University of Leicester. She is contributing editor of Methani, Directors' Disqualification (Butterworths, looseleaf) and is the author of Transaction Avoidance in Insolvencies (Oxford University Press, 2001).

In her introduction, Ms. Parry presents a concise and clear background of the various events, which lead to the ultimate goal of achieving a uniform corporate rescue in Europe. She defines the term "corporate rescue" in the monograph as statutory corporate insolvency procedures that offer an alternative to liquidation of the corporate assets. Ms. Parry points out the emergence of new developments producing striking compromises in national legislative agendas dealing with problems of financially troubled corporations. For example, creditors traditionally wielded considerable power in the administrative receivership procedure in the United Kingdom. However, under the present reforms, this procedure is all but abolished in favor of more collective administrative procedures in which all creditors' interests are considered. In France, the employee-centered system's primary goal has been to preserve jobs; while laudable, this approach is in some instances not possible, and liquidation is inevitable. Ms. Parry describes the open method of coordination established by the Lisbon Summit of the European Council held in 2000. Under this method, member states assist one another in determining their own policies.

In the introduction, Ms. Parry discusses the key differences in corporate rescue laws in the European Union by pointing out the following areas of differences:

  1. requirements for entry
  2. recognitions of difficulties
  3. monitoring the operation of the enterprise
  4. treatment of creditors
  5. financing
  6. treatment of transactions between members of a corporate groups
  7. public attitudes and awareness
  8. publicity
  9. insolvency practitioners and the courts
  10. simplicity
  11. availability of sanctions against managers of insolvent companies.

The monograph further includes the following works:

  • Marie-Jeanne Campana contributed A Critical Evaluation of the Development and Reform of the Corporate Rescue Procedures in France. She is a professor and former dean of the law faculty of the University of Paris-X Nanterre, and author of the annotated edition of Code de Commerce, published by Litec.
  • Paul J. Omar contributed The Progress of Reforms to Insolvency Law and Practice in France. Mr. Omar was a lecturer on the European Insolvency Regulations at Sussex University and currently he is a lecturer at the University of Wales Swansea.
  • Eckart Ehlers, who is a practicing attorney in Germany and a qualified solicitor in the United Kingdom, provided German Statutory Corporate Rescue Proceeding: The Insolvenzplan Procedure.
  • Alberto Jorio, a professor of commercial law at the University of Turin, contributed An Overview of the Italian Insolvency Procedures and Proposed Reforms.
  • Rafael Sebastian and Jaime Pereda contributed Insolvency Proceedings in Spain—An Overview of the Proposed Insolvency Laws. Both are practicing attorneys in Spain, and Mr. Rafael is a lecturer at the University of Comillas in Madrid.
  • Anders Holmgren, a Swedish practicing attorney specializing in international commercial law, provided The Swedish Reorganization Law.
  • The book's co-editors, Ms. Parry and co-editor Prof. Gromek Broc, supplied the articles "United Kingdom: Administrative Receivership and Administration and Company Voluntary Arrangements and the 'Rescue Culture' in Light of the Insolvency Act 2000."
  • Finally, University of West England lecturer Kate Dawson contributed Cross-border Insolvency in the European Context.

With the ever-expanding international commerce between the United States and the 28 European Union nations, this comprehensive overview of the current developments and reforms dealing with cross-border insolvencies and corporate failures should be a very helpful guide and research tool to all who are involved with corporate insolvencies in Europe.

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Thursday, September 1, 2005

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