« Predicting the Next Chapter 11 Wave | Main | Financial Stability Board Calls for Effective Consumer Finance Protection »

Two worlds and in between

posted by Stephen Lubben

A discussion about why nation-by-nation bankruptcy fails when dealing with global enterprises, here.

Comments

I would disagree, if bankruptcy systems gave a priority to nonadjusting creditors.

Adjusting creditors (i.e., banks and bonds) almost always fund through the parent. If there were only adjusting creditors, subs really couldn't go bankrupt--they would be simple bags of assets and flow-through vehicles for incidental liabilities like trade credit and paychecks. The problem here is that the non-adjusting creditors are stuck down in the subsidiary level, and they don't receive a priority.

The problems of cross-border multi-entity insolvency are not inherent. They're largely self-inflicted.

The comments to this entry are closed.

Contributors

Current Guests

Follow Us On Twitter

Like Us on Facebook

  • Like Us on Facebook

    By "Liking" us on Facebook, you will receive excerpts of our posts in your Facebook news feed. (If you change your mind, you can undo it later.) Note that this is different than "Liking" our Facebook page, although a "Like" in either place will get you Credit Slips post on your Facebook news feed.

News Feed

Categories

Bankr-L

  • As a public service, the University of Illinois College of Law operates Bankr-L, an e-mail list on which bankruptcy professionals can exchange information. Bankr-L is administered by one of the Credit Slips bloggers, Professor Robert M. Lawless of the University of Illinois. Although Bankr-L is a free service, membership is limited only to persons with a professional connection to the bankruptcy field (e.g., lawyer, accountant, academic, judge). To request a subscription on Bankr-L, click here to visit the page for the list and then click on the link for "Subscribe." After completing the information there, please also send an e-mail to Professor Lawless (rlawless@illinois.edu) with a short description of your professional connection to bankruptcy. A link to a URL with a professional bio or other identifying information would be great.

OTHER STUFF