Rethinking Receivership

Posted: 29 Feb 2008

See all articles by John Armour

John Armour

University of Oxford - Faculty of Law; European Corporate Governance Institute (ECGI)

Sandra Frisby

University of Nottingham

Abstract

It is a popular perception that administrative receivers and their appointors hold 'too much' power in relation to troubled companies. Many who hold this view have called for the reform of insolvency law in order to redress the balance of power. This issue is timely, because insolvency law is currently under review. This article argues that although the law's 'formal' structure is imbalanced, it 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. It is suggested that this procedure is likely to be more efficient than one conducted by a state official, and that it is likely to reduce the costs of debt finance, a matter of particular importance for small and medium-sized businesses. Empirical data are presented from 26 interviews with practitioners, which shed further light on the operation of receivership. Finally, the current law is compared with possible alternatives. It is argued that the case for wide-ranging reform is not made out.

Suggested Citation

Armour, John and Frisby, Sandra, Rethinking Receivership. Oxford Journal of Legal Studies, Vol. 21, No. 1, pp. 73-102, 2001, Available at SSRN: https://ssrn.com/abstract=821599

John Armour (Contact Author)

University of Oxford - Faculty of Law ( email )

St Cross Building
St Cross Road
Oxford, OX1 3UL
United Kingdom
+44 1865 281616 (Phone)

HOME PAGE: http://www.law.ox.ac.uk/people/john-armour

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Sandra Frisby

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

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