1 / 11

Informal Workouts as a Means for Addressing Legal Shortcomings

Informal Workouts as a Means for Addressing Legal Shortcomings. Forum for Asian Insolvency Reform Seoul – 10 November 2003. 1. The need for a global solution. The Ammanati insolvency in 1302 The Herstatt insolvency in 1974 The lessons. 2. Workouts may offer a global solution.

jeanier
Download Presentation

Informal Workouts as a Means for Addressing Legal Shortcomings

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Informal Workouts as a Means for Addressing Legal Shortcomings Forum for Asian Insolvency Reform Seoul – 10 November 2003 1

  2. The need for a global solution • The Ammanati insolvency in 1302 • The Herstatt insolvency in 1974 • The lessons 2

  3. Workouts may offer a global solution • International provisions of Bankruptcy laws deal with cross-border assets of one single entity but do not deal with group of companies • Example: the EU Regulation of 29 May 2000 on International Insolvency

  4. The « Enron » example • A unique filing in New-York for all US entities • A filing in London for Enron Europe

  5. The Sisas insolvency Sisas Italy Pantochim (B) Sisas Lux

  6. Another advantage • The absence of stigma

  7. How to implement a workout? • Set up a task force to assess the difficulties (lawyers, auditors, etc.) • Convening all or the major creditors to obtain a “stay”

  8. Pool of creditors • One single estate • Different committees

  9. Negotiation and implementation of the plan • Social plan • Sale of assets • Debt/equity swaps • Focus on profitable activities

  10. The risks • Process rests on consent • If not controled, individual actions may lead to the « grab-rule » and to liquidation.

  11. The challenges • Lawmaker promotion of workouts • But beyond what the law can do: “A fire remains a fire” • And hope: “the earth hardens after the rain

More Related