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Insolvency statutory rules and contractual freedom: a study on the limits of corporate insolvency law in the Anglo/American tradition

Vaccari, E. (2018). Insolvency statutory rules and contractual freedom: a study on the limits of corporate insolvency law in the Anglo/American tradition. (Unpublished Doctoral thesis, City, University of London)


Back in 1986 Thomas H. Jackson published a ground breaking work for insolvency literature: The Logic and Limits of Bankruptcy Law. Since then, much ink has been spilled in the investigation of the foundations of insolvency law. Many scholars have argued for the implementation of rescue- or debtor-oriented practices, in order to give a “second chance” to the honest but unfortunate debtor, or to save a distressed but viable business. Others have advocated for maximising the return to creditors to protect the rights bargained for by the parties in solvent times. In other words, the debate has focused on the “logic” of this area of law and it has been primarily either principle or purpose-oriented. This study, on the other hand, focuses on the other pillar of Jackson’s literary work: the “limits” of insolvency law. Insolvency remedies can be considered as a statutory endorsement of breaches of contracts. Insolvency law is not a synonym of rescue law. As a result, insolvency rules should apply only when contractual or general law remedies are no longer appropriate to deal with the ailing debtor. The main purpose of this research is therefore to investigate when, to what extent and if at all statutory insolvency rules should depart from the law of contract in market-driven jurisdictions. As a result, this study focuses on selected common law jurisdictions - the United States and the United Kingdom (rectius, England and Wales) - to investigate the circumstances that should justify the enforcement of insolvency (rectius, corporate distress) rules. This thesis complements problem and principle-informed theories to suggest a novel mechanism to determine the limit of insolvency law. To date, practitioners, scholars and judges have not fully acknowledged this issue and its implications for business practice. Legal systems fail to provide comprehensive guidance on the matter of the co-ordination between insolvency rules and the enforceability of the rights negotiated by the parties in their contracts. The aim of this thesis is to acknowledge, critically analyse, investigate 10 and suggest solutions to this issue and, in doing so, make an original and significant contribution to the field. This work will propose an innovative solution to determine when companies should rely on corporate distress remedies. Nevertheless, it does not claim that the proposed approach is the best or optimal one. It highlights the benefit that the proposed conceptualisation is expected to achieve over existing statutory and theoretical approaches and it identifies the factors that are most likely to promote (and to thwart) this new conceptualisation of the law of corporate distress.

Publication Type: Thesis (Doctoral)
Subjects: K Law
Departments: Doctoral Theses
The City Law School > The City Law School Doctoral Theses
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