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Properly balancing between public and private interests is one of the most significant and complex challenges presented by modern insolvency law. The European Union insolvency law has recently embraced that challenge, by reinforcing the role that private actors, such as creditors and stakeholders, are called upon to play within the context of insolvency proceedings. That approach to insolvency has gradually reduced the impact of public actors, such as judges and public officers, in managing the debtor’s financial difficulties. The individual consent seems to be the new way of facing the debtor’s insolvency. First, this Article examines the role of individual consent in insolvency proceedings in terms of economic efficiency. It focuses on the tendency to favor agreements between the debtor and creditors or the insolvency practitioner in several European legal systems when they increase the likelihood to produce efficient results for both the parties. The second part of this Article focuses on the European Regulation on cross-border insolvency proceedings no. 848/2015. I offer some critical thoughts about the unilateral undertaking under article 36 of the European Regulation. It represents a relevant means of managing the debtor’s cross-border insolvency through an agreement between the insolvency practitioner in the main insolvency proceedings and local creditors in order to avoid the opening of inefficient secondary proceedings.

This article focuses on the coordination of main and secondary insolvency proceedings in cross-border insolvency cases. The authors analyse how main and secondary insolvency proceedings should be coordinated in different aspects of these proceedings, namely: the opening of insolvency proceedings, the exercise of creditors’ rights, and the treatment of the debtor’s assets. The procedural peculiarities of the opening of secondary insolvency proceedings are also discussed. The article also examines how insolvency practitioners and courts in parallel cross-border insolvency proceedings should coordinate their actions to ensure proper response to the debtor’s insolvency problems. Moreover, the authors assess the relevant case law of the Court of Justice of the European Union and whether is compatible with the goal of effective cross-border insolvency proceedings.

The purpose of this book is to provide a coherent overview of the insolvency systems found around the world. Its intended audience includes academics, judges, lawyers, and policymakers. Its focus is on businesses rather than natural persons. The authors hope to give the reader a sense of some of the principal approaches to managing the general default of a business debtor. The authors will discuss the nature of the costs and benefits arising from the various policy choices legislators have made. In the process, they will emphasize the close interrelationship among various elements of an insolvency regime so that these elements can be viewed as part of an overall system and not just as a series of policy decisions about particular rules, such as the method of initiation of an insolvency case or the balance struck in setting the boundaries of an avoidance power. The organization of the book reflects our view of insolvency laws as complete systems, including not only the 'insolvency' or 'bankruptcy' code of a jurisdiction but also closely related laws and the institutional framework in which those laws are applied. The book takes a systematic approach to a variety of topics related to credit and insolvency regulation. The functional analysis starts with the study of debt enforcement, continues with an examination of general corporate insolvency legislation, corporate rehabilitation proceedings, informal workouts, employee rights, judicial and administrative institutions, and the considerations key to cross-border insolvency proceedings.

This study provides a conceptual framework for the analysis of the questions of out-of-court debt restructuring from a policy-oriented perspective. The starting point of the analysis is given by the World Bank principles for effective insolvency and creditor rights systems. The study offers an overview of out-of-court restructuring, which is not seen as fundamentally opposed to formal insolvency procedures. Actually, the study contemplates different restructuring techniques as forming a continuum to the treatment of financial difficulties. The study discusses the advantages and disadvantages of all the debt restructuring techniques, and concludes, in this regard, that a legal system may contain a number of options a menu that can cover different sets of circumstances. In the end, the law may offer a toolbox with very different instruments that the parties may use depending on the specific facts of the case. The study also provides a checklist that can be used to examine the features of a legal system that bear a direct influence on debt restructuring activities.

This paper aims to answer the following research question: what is the common debtors’ assets size within the insolvency proceedings in Croatia, and what is the relation of the size of the assets to the appointment system? The goals and purpose are to deliver a dynamic, analytical overview of the of appointment system of insolvency practitioners in the Republic of Croatia, and to study them in relation to the debtors’ asset size. The database of appointments, originally published by the Croatian Ministry of Justice, is here coupled with the annual financial reports data, which created an initial matrix of 32,840 appointments among cases with a total nominal value of 70.07 billion HRK (9.34 billion €). The results show that the Croatian insolvency system annually, on average, processes cases with a total value of approximately 10 billion HRK (1.33 billion €), which indicates the importance of this system for the economy in general, but also for the legal system which regulates it. Furthermore, for the first time in Croatia, the results provide public insight into quantitative indicators on a national level, which opens a new area for broader examination.

European Commission has performed a review of Member States’ insolvency law systems, with the conclusion that there are still several Member States where restructuring is not an option for companies facing financial struggles without being insolvent. Furthermore, there are more legal differences regarding regulation in the insolvency area, which has a negative effect for the smooth development and efficient performance of the EU domestic market. As a result, the European Directive on restructuring was introduced with the aim of aligning insolvency law in Member states. One of the goals of the Directive on restructuring is the creation of preventive restructuring systems, but the document does not present a definition of preventive restructuring nor a guideline for the implementation of these systems. This article aims to describe the key features and attributes of the preventive restructuring system and to analyse the conditions of the application of preventive restructuring. In this article, the preventive restructuring system is compared with pre-insolvency and informal restructuring procedures, defining their similarities, differences, and advantages. Lithuania has implemented part of the provisions of the Restructuring Directive by legislating changes in the insolvency law of Legal persons, and a preventive restructuring system was established by a by-law. Based on the conclusions derived in the research regarding the concept and essence of the preventive restructuring system, this article aims to answer the question of whether current legislation will allow the goals of Directive to be achieved, and whether the legislation in Lithuania establishes a proper preventive restructuring system.

This study examines the interaction between insolvency proceedings and strategic variables and their relationship with firm survival. Unlike previous research, this study considers the firm’s legal status, including insolvency proceedings, and fills a gap in the literature by considering legal considerations in business studies. Adopting a legitimacy perspective, we employ a Cox proportional hazards model to construct a survival model based on a theoretical framework encompassing insolvency proceedings retrenchment, firm age, and causes of financial distress. Our sample consists of French SMEs facing financial difficulties. The findings reveal that initiating insolvency proceedings is negatively associated with firm survival. However, retrenchment of employees or assets during insolvency proceedings is associated with a higher likelihood of survival. Contrary to expectations, firm age showed a negative association with firm survival during the insolvency proceedings. Moreover, the study revealed a positive association between insolvency proceedings and firm survival in cases of firm-specific financial distress. This research provides new insights into the relationship between insolvency proceedings and firm survival.Plain English SummaryWhat are the conditions for an SME to survive insolvency proceedings? This study addresses this question by investigating the interaction between insolvency proceedings and the various factors that influence a firm’s ability to survive. It fills a gap in the literature by considering the firm’s legal situation, which offers a new context for action in the case of insolvency. The study finds that starting insolvency proceedings negatively affects a firm’s survival, but retrenchment of employees or assets during proceedings can improve the chances of survival. Surprisingly, the study finds that firm age negatively impacts firm survival during proceedings. However, insolvency proceedings have a more favorable effect on firm survival in cases of firm-specific financial distress. The findings have practical implications for executives and boards as the outcome of a retrenchment strategy may vary based on whether it is executed in or outside of court, and insolvency proceedings can provide legitimacy for specific strategies.

This article analyzes the concept of viability and its interpretation in insolvency law in relation to the restructuring of enterprises where creditors provide financial support in order to avoid bankruptcy. The significance of viability in insolvency law is assessed, as this concept is regulated by international legal acts regulating insolvency proceedings, i.e. European Union law. The complex nature of viability and the assessment of the economic situation of the company are analyzed. The author also examines the precise meaning of viability when applying the Law on Insolvency of Enterprises of the Republic of Lithuania, and the objectives and economic justification for the establishment of this concept. The author asserts that viability is an economic category, the assessment of which requires not only legal, but also special economic, financial, and market knowledge. Recent case law on the interpretation and application of the viability condition in the restructuring process is analyzed. Moreover, the author suggests which circumstances may prove the non-viability of the enterprise and when bankruptcy proceedings should be commenced.

The article investigates the relationship between the efficiency of insolvency proceedings, as measured by their duration, and measures the severity of bankruptcy law toward debtors in 27 countries, of which 23 are EU. This objective was achieved using quantitative methods – Pearson’s correlation, pooled panel regression and Granger causality. Research shows no direct correlation between the two variables mentioned above. The increase in sanctions in bankruptcy law contributed to a decrease in the efficiency of insolvency proceedings. In addition, less stringent conditions concerning the time taken to file a bankruptcy petition translated into a shorter duration of insolvency proceedings. Therefore, supporting the New Opportunity Policy, we recommend that regulators focus on softening the legal requirements for filing a bankruptcy petition, for setting a time limit for filing and on reducing the sanctions for honest debtors, including those imposed for failure to file for bankruptcy within the period prescribed by law.