Contractarianism, Contractualism, and the Law of Corporate Insolvency
World Bank Global Initiative on insolvency and Creditor/Debtor Regimes; University College London (UCL) - Faculty of Laws; Chambers of Michael Crystal QC
Singapore Journal of Legal Studies, pp. 51-95, July 2007
What is the appropriate way of theorising about corporate bankruptcy law? That lies, argues this paper, in rejecting Pareto and Kaldor-Hicks efficiency in favour of a particular conception of transaction cost efficiency, and in rejecting the 'contractarian' Creditors' Bargain Model in favour of the 'contractualist' Authentic Consent Model. The paper vindicates these arguments with an analysis of the automatic stay which characterises the collective liquidation regime, of the pari passu principle often said to be at the heart of this regime, and of the liability imposed in some jurisdictions on the managers of terminally distressed companies for failing to take reasonable steps to avoid further loss to their company's creditors.
Number of Pages in PDF File: 45Accepted Paper Series
Date posted: December 17, 2007
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