1
K.Marx, Capital. A Critique of Political Economy,Volume 111, Penguin Books, 1992, p.953.2
T.Hadden, Company Law and Capitalism, second edition, Weidenfeld & Nicolson, 1977, p.3.3
Insolvency Law and Practice. Report of the Review Committee, para.10.4
Op.cit, para. 200.5
See J.Holloway and S.Picciotto [ed], The State Debate, 1978, p.14.6
Fetishism is the contrual of social relations as "thing-like," perverting such relations into a commodified or sheerly structural form.7
See R.Fine and S.Picciotto, On Marxist Critiques of Law in I.Grigg-Spall and P.Ireland [ed], The Critical Lawyers' Handbook, Pluto Press, 1992, p.18.8
W.Bonefeld, Social Consitution and the Form of the Capitalist State in W.Bonefeld et.al. Open Marxism, Volume 1: Dialectics and History,Pluto Press, 1992, p.108.9
D.Smith, 1993.10
See I.Grigg-Spall et.al Company Law in I.Grigg-Spall and P.Ireland, 1992, p.98.11
See L.Hancher and M.Moran [ed], Capitalism, Culture, and Economic Regulation, Clarendon Press, 1989, p.2.12
Cmnd.8558, para.21.13
R.Cotterell, Power, Property and the Law of Trusts: A Partial Agenda for Critical Legal Scholarship, in P.Fitzpatrick and A.Hunt [ed] Critical Legal Studies, Blackwell 1987, p.82.14
Bowers,Groping and coping in the shadow of Murphy’s Law: Bankruptcy theory and the elementary economics of Failure, 88 Mich L Rev 2097, pp.2102-2103, 1990.15
K.Williams, J.Williams and C.Haslam,Do Labour Costs Really Matter ? Work, Employment and Society 3[3], pp.281-305, September 1989.16
P.Bell and H.Cleaver, Marx's Crisis Theory as a Theory of Class Struggle, Research in Political Economy,5, 1982.17
Bonefeld and Burnham, 1996, p.29.18
JM.Garrido, The Distributional Question in Insolvency: Comparative Aspects, 4 International Insolvency Review, 1995, p.33.19
R.Goode, "The Exodus of the Floating Charge" in D.Feldman and F.Meisel (Ed), Corporate and Commercial Law: Modern Developments, Lloyd’s of London Press Ltd, 1996, p. 193.20
Cmnd. 8558, para 1531.21
Cmnd.8558, para 1535.22
The Fourth SPI Survey, 1994, p.14.23
Goode, The Exodus of the Floating Charge, 1996, p.199; Goode, Legal Problems of Credit and Security, Sweet & Maxwell [2nd ed] 1988, pp.46-132; RR Pennington, The Genesis of the Floating Charge, (1960) 23 M.L.R. 630; S.Worthington, Floating Charges - An Alternative Theory, Cambridge Law Journal 53[1] March 1994, p.81-103; E.Farran, Floating Charges - The Nature of the Security, Cambridge Law Journal 213.24
L.G.Doyle, Administrative Receivership: Law and Practice, FT Law & Tax, 1995, p.1.25
Cmnd.8558, para.1538.26
Ibid, p.1.27
Assets and the Treatment of Claims in Insolvency, 108 L.Q.R. p.460.28
D.Milman, Priority Rights on Corporate Insolvency,1991, p.71.29
See F.Oditah, Assets and the treatment of claims in insolvency, 108 The Law Quarterly Review 1992; R.Goode, Ownership and Obligation in Commercial Transactions,103 The Law Quarterly Review, 1987.30
Cmnd.8558, para.104.31
Goode, 1996, p.201.32
Ibid, p.201; See also Goode, 1988, pp.17-23; J.K.Maxton, Negative Pledges and Equitable Principles, J.B.L; JB Stone, The 'Affirmative' Negative Pledge, 9 J.B.L.364 [1991]33
See L.A.Bebchuck and J.M.Fried, The Uneasy Case for the Priority of Secured Claims in Bankruptcy, The Yale Law Journal 105, p.859; A.N.Berger and G.F.Udell, Collateral, Loan Quality and Bank Risk, 25 Journal of Monetary Economics (1990); J.D.Leeth and J.A.Scott, The Incidence of Secured Debt: Evidence from the Small Business Community, 24 J.Fin & Quantitative Analysis (1989); R.E.Scott, A Relational Theory of Secured Financing, 86 Colum.L.Rev (1986).34
A.B.Frankel and J.D.Montgomery, Financial Structure: An International Perspective, Brookings Papers on Economic Activity, 1991, p.267. Unfortunately, they do not analyse the split between secured and unsecured debt, nor give a breakdown between small,medium and large private companies or plcs and include within bank loans commercial paper issues and lending by non-bank financial intermediaries.35
p.43.36
M Bridge, The Quistclose Trust in a world of secured transactions, Oxford Journal of Legal Studies, Vol.12, 1994.37
See Schwartz, Security Interests and Bank Priorities: A Review of Current Theories, (1981) Journal of Legal Studies 1, 15; Kripke, A Theory of Loan Priorities, (1989) 18 Journal of Legal Studies 209, 245; Bridge, 1994, p.337,338.38
Bridge, 1994, p.337.39
Ibid, p.338.40
Cork Committee, Cmnd.8558, paras.233 and 1396.41
See D.Milman, Priority rights on Corporate Insolvency (1991).42
Oditah, p.469.43
Bridge, 1994, p.340.44
Ibid.45
See recent Court of Appeal decision in Re Bank of Credit and Commerce International SA (No.8) All ER, April 1996 for a detailed analysis of this exception.46
W.Jones, MLR 43[5] September 1980.47
See S.Rajani, Equitable Assistance in the Search for Security in H.Rajak [ed] 1991, pp.17-43.48
Oditah, p.469.49
See Bridge, 1994; G.Moffat, Trusts Law.Texts and Materials [2nd ed] Butterworths, 1994.50
[1995] 2 All ER 390, [1975] 1 WLR 758.51
See G.M.D.Bean, Debt Subordination Validated (1994) 15 Co.Law 52;52
1 BCLC 1 For a comment on this case, see RC.Nolan, Less Equal than Others- Maxwell and subordinated unsecured obligations, JBL 1995. For a general discussion of the issues raised, and we discuss them in due course, see P.Wood, The law of subordinated debt,Sweet & Maxwell, 1990; R.Goode, 1988.53
F.Oditah,Light-weight floating charges,(1991) JBL 4954
BCLC 84455
Oditah, p.473.56
V.Finch,Directors’ Duties:insolvency and the unsecured creditorin Current Issues in Insolvency Law, Stevens, 1991.57
The recent case of Re WBSL Realisations 1992 Ltd, Re Ward Group plc, 2 BCLC [1995] is an interesting example of where unsecured creditors threatened to procure the compulsory winding up of the company, in administration, where the administrators wanted to realise a surplus on the company's pension scheme for distribution to secured and unsecured creditors.58
1994, p.460.59
See Lynch et.al 1996, p.100.60
p.500.61
R.Hilferding, Finance Capital, Routledge & Kegan Paul, 1910/1981.62
E.Altvater, Kredit und Hegemonie in M.Janicke [ed] Vor uns die goldenden neunziger Jahre ? Piper, Munich, 1985.63
A recent example of British Land raising £114 million of long-dated debt through the securitisation of a lease of one of its properties illustrates this point. British Land raised a 22 year fixed-rate loan secured on the rent paid by NatWest Markets which occupied a property, part of the Broadgate office development, Brit Land aquired early in 1996. The NatWest loan is financed in the US commerical paper market. The securitisation meant that Brit Land had cheaper long-dated financing than could otherwise have been obtained through a conventional bond issue. The proceeds will be used to finance an existing £398 million lease securitisation put in place in 1991 by Rosehaugh and Stanhope, the property companies which developed the Broadgate office complex. See Financial Times 27.9.96. See also the $4 Billion multi-tranche securitization of GPA, underwritten by a syndicate of banks, which enabled GPA to slash its total debt from $4.4 Billion to £1.56 Billion, Air Finance Journal [183], April 1996. See also Financial Times 10.10.96 where they report the use of a multi-tranche securitisation being used in corporate acquisitions. Stagecoach has become the first publicly quoted company in the UK to fund its acquisition of Porterbrook Leasing by transferring corporate debt into bonds for sale on the international equity markets, providing a further boost for the Asset-Backed Securities market in the UK.64
K.Marx, Capital, Volume 111, Penguin Books 1981, p.570.65
J.Flood and E.Skordaki, Insolvency Practitioners and Big Corporate Insolvencies, ACCA Research Reports, 43, 1995, p.28.66
Ibid.67
For an overview of these difficulties and the attidue of the judiciary within the UK, see Fletcher (1996), pp.767-789. We shall discuss in detail the specific problems raised shortly.68
G.Dyer, Financial Times, 8.10.96.69
Financial Times, 11.10.96.70
See also A.Shaw, Banks reward small firms for sharpening their skills, The Independent on Sunday, 26.6.199471
See D.Milman, The Administration Order Regime and the Courts,in H.Rajak [ed] 1993, p.381, footnote 53.72
See Practice Note, Administration Order Applications: Contents of Independent Reports, [1994] 1 WLR 160.73
Milman and Chittenden, 1995, p.3.74
Milman [1993] concludes that the courts have been surprisingly co-operative when dealing with administration order cases given the fact that the Chancery judges, traditionally staunch defenders of property rights, have interfered substantially with those rights in promoting the common good of corporate rehabilitation. We deal with the issues raised here later in this book.75
The Fourth SPI Survey, 1994, p.5.76
Striking-off by the Registrar of Companies is made possible by section 652 Companies Act 1985, read in conjunction with sections 652A-652F.77
Financial Times, 10.9.1996.78
M.Chesterman, Small Businesses [2nd ed], Sweet & Maxwell, 1982, p.98.79
S.Rajani, Tolley's Corporate Insolvency [2nd ed] 1994, p.634.80
See MJ.Peel and N.Wilson, Working Capital and Finanical Management in the Small Firm Sector, International Small Business Journal 14[2], 1996.81
January 1996, p.12.82
Smaller Firms in Britain Report 1995, DTI:London.83
Of course, this shift in employment share does not necessarily represent an increasing contribution to net job creation.84
Small business defined as those employing less than 100 employees.85
The alerte procedure which is started by the auditor is extended to S.A.R.L, S.N.C. and S.C.S. companies, see the new article 230-2 L.1966.86
1995, p.iii.87
For a discussion of these issues, see J.Freedman, Small Businesses and the Corporate Form:Burden or Privilege ? 57 Modern Law Review, July 1994; A.Hicks et.al. Alternative Company Structures for the Small Business, ACCA Research Reports, No.42 1995.88
See C.Campbell and B.Underdown, Corporate Insolvency in Practice: An Analytical Approach, Chapman:London, 1991, chapter 2. We discuss the empirical evidence on why companies fail later on in this text.89
See A.Nelson, Treasury Aims to Bridge Finance Gap, The Sunday Times, 19.9.1993.90
The Guardian, 24.9.1996.91
See P.Hutchinson and G.Ray, Surviving the Financial Stress of Small Enterprise Growth, in J,Curran et.al. The Survival of the Small Firm, Vol.1, Gower, 1986.92
See M.Springman, Equity and Loan Financing for the Private Company, Gower, 1973; D.Watkins, Financial Facilities and the Smaller Firm, Unpublished Paper, Manchester Business School, 1975; J.Bates, The Financing of Small Business, Sweet & Maxwell [2nd ed], 1971; Peel and Wilson, 1996, p.52.93
J.Willcock, Turning against the Banks, Independent on Sunday, 16.5.1993.94
p.15.95
Small firm defined as one with an annual trunover of less than £1 million. See Bank of England Third Report, p.15.96
Bank of England Third Report, p.15.97
See Curran et.al, Small Firms in Services -The 1995 Survey, November 1995; ABCC, Small Firms Survey:Finance - The views of small firms a year on, 1995.98
Ibid, pp.26-28, section 6: Equity Investment and Venture Capital.99
A.McGee, Corporate Sickness and Corporate Rescue in Europe. A Modest Proposal for Reform, in J.Wouters and H.Schneider, Current Issues of Cross-Border Establishment of Companies in the European Union, MAKLU Uitgevers Antwerpen, 1995, pp.224-228.100
See T.Hoshi, A.Kashyap and D.Scharfstein, The role of banks in reducing the costs of financial distress in Japan, Journal of Financial Economics 27 (1990) pp.67-88.101
See M.Berlin and KJA Saunders, Bank equity stakes in borrowing firms and financial stress, The Review of Financial Studies 9[3] Fall 1996, pp.889-919.102
See RE.Floyd, Corporate Recovery: The London Approach, Insolvency Law & Practice 11[3] 1995; C.Bird, The London Approach, Insolvency Law &Practice 2[3] 1996; J.Flood et.al (1995); M.Smith, The London Approach and trading in Distressed Debt, Bank of England Quarterly Bulletin, May 1996; F.Pointon, London Approach: A look at its implications and its alternatives, Insolvency Bulletin, March 1994; M.Smith, Saving Businesses - The London Bankers Approach, Paper presented to INSOL Conference, Melbourne Australia, 1993.103
Smith, 1996, p.223.104
P.Kent, The London Approach, Speech to Chartered Institute of Bankers, 11.1.1992.105
Ibid, p.111.106
See Flood et.al (1995).107
See A.B.Frankel and J.D.Montgomery,Financial Structure: An international overview,Brookings Papers on Economic Activity, 1991, pp.228-289. For an empirical study of the incentives of financially distressed companies in the U.S.A. restructuring their debt outside Chapter.11, see S.C.Gilson and K.J & H.P.Lang, Troubled debt restructurings. An empirical study of private reorganisation of firms in default, Journal of Financial Economics 27 (1990) pp.315-353; P.Bolton and D.S.Scharfstein, Optimal Debt Structure and the Number of Creditors, Journal of Political Economy 104[11] 1996.108
Floyd, 1995, p.83.109
Although researchers have found evidence that close ties between banks and firms may reduce the costs of financial stress for borrowing firms, in Germany the evidence is mixed. See J.Edwards and K.Fischer, Banks, Finance and Investment in Germany,CUP 1994; C.Harm,The role of universal banks and majority shareholders to overcome financial constraints: Evidence from German balance sheet data,Unpublished working paper, New York University, 1993; T.Baums, Banks and Corporate Control in Germany, in J.McCahery et.al, Corporate Control and Accountability, Clarendon Press, 1993. For the American position, see C.James, When do banks take equity ? An analysis of bank loan restructurings and the role of debt, Unpublished working paper, University of Florida, 1993. See also, A.Ozkan,Corporate Bankruptcies, liquidation costs and the role of banks, The Manchester School Supplement, 1996.110
Baum, 1993, p.268. It should be noted that this control is being scrutinized and the Monopolkommission, a commission advising the German government on anti-trust issues, has repeatedly suggested that the powers of banks, especially their equity investment power be limited.111
Furthermore, one also needs to address the empirical question of how and why the choice between equity and debt is made and the factors which necessitate companies entering into convertible debt financing. See, J.W.Munro, Convertible Debt Financing: An empirical analysis, Journal of Business Finance and Accounting, 23[22] March 1996; P.Marsh, The choice between Equity and Debt: An empirical study, The Journal of Finance, 32[1] March 1992.112
July 1994; see also Curran, Bolton Fifteen Years On: A Review and Analysis of Small Business Research in Britain, 1971-1986, Small Business Research Trust,London, 1986.113
See Bank of England Quarterly Bulletin, Mezzanine Finance, 35[4] November 1995, p.373.114
J.Holloway, Global Capital and the Nation-State, 52 Capital & Class, Spring 1994, p.25.115
H.Radice, British Capitalism in a Changing Global Economy in A.MacEwan and WH Tabb [ed], Instability and Change in the World Economy, Monthly Review Press:New York, 1989; see also Radice, The National Economy: A Myth ? 22 Capital & Class 1984; Radice, International Firms and Modern Imperialism Penguin, 1975; Radice, Capital, Labour and the State in the World Economy, Unpub.Paper, University of Leeds, September 1990.116
S.Picciotto, The Internationalisation of the State, 43 Capital & Class, Spring 1991, p.47.117
That is, a currency market outside national regulatory control.118
See T.Coakley, The Internationalisation of Bank Capital, 23 Capital & Class, Summer 1984; W.Andreff, The International centralization of capital and the re-ordering of world capitalism, 22 Capital & Class, Spring 1984.119
P.Dicken, Global Shift. The Internationalisation of Economic Activity [2nd ed], Paul Chapman Publishing Ltd, 1992, p.359.120
For example, NIFs or Note Issuance Facilities. NIFs are short to medium term issues of commercial paper allowing borrowers to raise loans on a revolving basis, directly on the securities market or with a group of underwriting banks.121
See Financial Times, 25.9.1996, 26.9.1996.122
Banker 146[840] February 1996, 20-22.123
Bird, 1996, p.87.124
Ibid, p.89.125
P.Kent, 1992, p.113.126
K.Marx, 1981, p.572.127
Cork Report, Cmnd.8558, para.235.128
P.R. Wood, Principles of International Insolvency, 1995, Sweet and Maxwell, p.1.129
J.M.Garrido, The Distributional Question in Insolvency: Comparative Aspects, 4 International Insolvency Review, 1995, p.25.130
The issue is a contentious one. For example, in the Law and Economics tradition in the United States, Jackson has repeatedly argued that the aim of insolvency proceedings is not to achieve a certain distribution of assets, but to impose co-operation among creditors, in order to maximise their aggregate returns. Distribution, he argues, must be left to non-bankruptcy law (general law) because bankruptcy is purely a procedural mechanism. See Bankruptcy, Non-bankruptcy entitlements and the creditors’ Bargain, 91 Yale LJ 1982; The Logic and Limits of Bankruptcy Law 1986. We discuss this issue later.131
See Wood, 1995, pp. 2-31 for a division of the world's jurisdictions into pro-debtor and pro-creditor groups.132
As Garrido explains, the pari passu rule has its origins in the Italian cities of the middle ages. In order to escape the cumbersome regulation of the ius commune and its complex system of privilegia a system of commercial bankruptcy was introduced. As he states, "the merchant’s bankruptcy (fallimento) had the outstanding feature of a distribution not regulated according to "general law"(non secundum ius dicta) but according to the principle of proportional distribution.....the pari passu principle. See pp.29 forward.133
Garrido, 1995, p.53.134
See the Bank of England Quarterly Bulletin, Company Profitability and Finance 35[3] August 1995 and Mezzanine Finance, 35[4] November 1995.135
See G.W.Johnson, The European Union Convention on Insolvency Proceedings: A Critique of the Convention's Corporate Rescue Paradigm, International Insolvency Review 5[1] Spring 1996, p.81; I.F.Fletcher, Practicalities of an international insolvency - the key legal aspects, The Company Lawyer 17[2] 1996.136
J.L.Westbrook, Global Insolvencies in a World of Nation-States, in A.Clarke (ed) Current Issues in Insolvency Law, Current Legal Problems, 1991, p.27.137
See Wood, 1995, pp. 291-295 for an inventory of bilateral conventions in application and the Nordic Convention 1933.138
Westbrook, 1991, p.27.139
Brussels Convention 1968, Article 1, paragraph 2140
The Guardian, 27.1.1994.141
A.Wolfe, The Limits of Legitimacy. Political Contradictions of Contemporary Capitalism, Collier Macmillan, London, 1977, p.226.142
For a discussion of the latter, see M.Armstrong, State, Capital and the Decomposition of Class Relations: International Transfer Pricing, 1945-1994, Forthcoming Critical Perspectives in Accounting.143
Which itself remains at an early stage of development.144
See for example P.S.R.F. Mathijen, A Guide to European Union Law, 6th ed, 1995, Sweet & Maxwell, pp. 199-202; P. Merle, Droit Commercial, Societes Commerciales, 4th ed, 1994, Dalloz, pp. 25-28, J. Steiner, Textbook on EC Law, 4th ed, 1995, Blackstone Press Ltd, pp. 252-253.145
For an exposition of the concerns to be considered in case of cross-border insolvency, see I. Fletcher, Harmonization of Jurisdictional and Recognition Rules: The Istanbul Convention and the Draft EEC Convention, in JS Ziegel [ed], Current Developments in International and Comparative Insolvency Law, 1994, Clarendon Press, pp. 709-714; Wood, 1995, pp. 227-230.146
Germany for example has refused to recognise proceedings in which the debtor's business is rescued at the expense of its creditors, leading it to disregard the US Chapter 11proceedings as an insolvency proceeding : see S. Reinhart, Germany's Insolvency Bill and its Cross-Border provisions, International Insolvency Review, 1993[2]189. Similarily, in Overseas Inns S.A.P.A. v. United States 911 F. 2d 1146, a Luxembourg judgment organising the debtor's reorganisation has been ignored by the 5th Circuit, causing and "unfairly prejudice to the United States : see for an evaluation of the USA's developments on cross-border insolvency : D.G. Boshkoff, Some Observations on Fairness, Public Policy, and Reciprocity in Cross-Border Insolvencies, in Ziegel [ed], 1994, 677-686.147
Westbrook, 1991, p.28.148
C.Morris, Cross-Border Rescues and Asset Recovery - Problems and Solutions, Insolvency Law & Practice 10[2] 1994, p.42.149
Fletcher, 1994, p. 709.150
Fletcher, 1996, p.769.151
E. Comm.Doc. 3327/1/XIV/70F.152
The whole draft bankruptcy project, including the 1970 draft convention, was based on the principle of universality and unity: one procedure would be opened in one jurisdiction only but would have effect in all Member States, and the convention's provisions would have been applied to any "undertaking" irrespective of its activities. We subject both draft conventions to a detailed critique later on. See Fletcher, 1996, pp. 770-772 and Fletcher, 1994, pp.714-717 for an analysis of their shortcomings.153
Fletcher, 1994, p. 710.154
Johnson, 1996, p.83. See also Fletcher, 1996, p.774 ff.155
G.W. Johnson, The European Union Convention on Insolvency Proceedings : A Critique of the Convention's Corporate Rescue Paradigm, International Insolvency Review, 1996, [1] 81.156
The Law Society's Joint Insolvency Law Sub-Committee, Draft EC Bankruptcy Convention: Comments, Memo.22, October 1994, p.2.157
F.Dahan, The European Convention on Insolvency Proceedings and the administrative receiver: a missed opportunity ? The Company Laywer 17[6] 1996, p.182.158
The ressemblance is due to the fact that Manfred Balz was one of the major draftsmen of the German Insolvency Bill and the chairman of the European committee of experts.159
Committee on Insolvency and Creditors' Rights - Committee J.160
See Westbrook, 1991, p.35 ff.161
Fletcher, 1996, The Company Lawyer, p.49.162
102 Bankr.373 (DNJ.1988).163
2 Lloyd's Rep.76 (1987). See Fletcher 1996, The Company Lawyer, p.49.164
Fletcher, 1996, p.784.165
The Co-Operation of Insolvency Courtss (Designation of Relevant Countries and Territories) Order 1986, (SI. 1986, No.2123). 17 Countries or territories have been designated so far, only one of which is not a Commonwealth country.166
Fletcher, 1996, p.787.167
[1992] BCC 372168
Fletcher, 1996, The Company Lawyer, p.49.169
Flood and Skordaki, 1995, p.40.170
See Justice Report, 1994, p.22, paras.5.1-5.7171
E.Warren, Bankruptcy Policymaking in an Imperfect World, Mich.L.Rev [92] 336, Nov 1993, p.338.172
D.G.Baird, A World Without Bankruptcy, Law & Contemporary Problems 50[2], Spring 1987.173
Chapter 5 of the annexes of the Code de Commerce is called "The difficulties of economical activities." It is separated into three constituent parts: prevention (Loi 1984, Statute on the prevention and Reglement Amiable of enterprises' difficulties), treatment (Loi 1985, Statute on the legal rescue and liquidation of enterprises) and Mandataires de Justice. Loi 1994 itself does not refer to "insolvency" as such, but is part of the general framework of the law of the enterprises in difficulty (Statute on the prevention and treatment of enterprises in difficulty).174
For attempts to develop a jurisprudence of insolvency, see Korobkin below. In the U.S. the jurisprudence has been primarily developed within the Law and Economics tradition, and although this work has been devastatingly critiqued, the influence of that tradition still prevails. See the seminal work of T.H.Jackson, The Logic and Limits of Bankruptcy Law, 1986. For criticisms, see D.G.Carlson, Philosophy in Bankruptcy, 85 Michigan Law Review, 1986-87; E.Warren, Bankruptcy Policy, U.C.L.R 54[3] Summer 1987; J.W.Bowers, Groping and coping in the shadow of Murphy's Law: Bankruptcy theory and the elementary economics of failure, 88 Michigan Law Review, June 1990; E.Warren, Bankruptcy Policy-Making in an Imperfect World, 92 Michigan Law Review. November 1993. For a general and simplistic overview of competing philosophies of bankruptcy, see A.Flessner, Philosophies of Business Bankruptcy Law: An International Overview, in J.S.Ziegel, 1994. See also, B.E.Addler, Financial and Political Theories of American Corporate Bankruptcy, Stanford Law Review 45[1] January 1993175
D.R.Korobkin, Rehabilitating Values: A Jurisprudence of Bankruptcy, Colum.L.Rev 91[4] May 1991176
Cmnd.8558, para.191.177
Ibid, p.725.178
The nature and value of rights in Rights, justice and the bounds of liberty: Essays in social philosophy, Princeton, NJ:Princeton University Press, 1980, pp.143 ff.179
See The Struggle for Recognition. The Moral Grammar of Social Conflicts, Polity Press, 1995, trans. J.Anderson. For a more general philosophical overview of Hegel's concept of recognition, see R.R.Williams, Recognition. Fichte and Hegel on the Other, State University of New York Press, 1992; C.Taylor, The Politics of Recognition in A.Gutman [ed] Multiculturalism and The Politics of Recognition, Princeton University Press, 1992.180
S Wheeler, 1994, p.369.181
Cmnd.8558, para.203.182
See J.Habermas, Between Facts and Norms. Contributions to a Discourse Theory of Law and Morality, MIT Press, Cambridge, Mass, 1996; W.Regh, Insight and Solidarity, University of California Press, 1994; C.Taylot, The Ethics of Authenticity, Harvard University Press,Cambridge:Mass, 1992.183
Flood et.al.1995, p.36.184
See I.Davies, The Trade Debtor and the Quest for Security, in H.Rajak [ed] 1991, p.63.185
Garrido, 1995, p.32.186
T.W.Adorno, Negative Dialectics, Routledge 1973, p.309.187
See R.J.Mann, Bankruptcy and the Entitlements of the Government: Whose Money is it Anyway ? New York University Law Review, 70[5] November 1995.188
Quoted in Flood et.al. 1995, p.21.189
Which has funds paid into it realised from bankruptcy and liquidation cases. For xeample, in 1992/93 at the height of the recession, the Insolvency Service Annual Report disclosed that the government derived an income of £50.6 million from banking fees and investment of these funds and gained a surplus of £9 million after setting off the costs of running the Insolvency Service, which, of course, they now want to contract out. Who says recession does not pay ?190
P.25.191
The Cork Committee rejected the argument that debts owed to the community should be paid in priority to debts owed to private creditors, arguing that debts owed to the state were likely to be less significant in terms of total government revenue receipts than the loss of a similar sum to a private creditor. See Cmnd.8558, para1410. Although many state entitlements were then abolished, schedule 6 to the 1986 Insolvency Act still has the state as a preferential creditor.192
Cmnd.8558.para.191.193
See P. Mehaignerie, Discours de synthese au colloque organise par le Ministere de la Justice, 23rd Sept 1993, Entreprise en difficulte, Quelles solutions?, Gaz.Pal. 12-16 Nov 1993, p. 21.194
Soinne, 1995, p.11.195
B.Soinne, Prolegomenes sur une refonte du droit de la faillite, in Dalloz.1976, chr. 43, p.254. Soinne already in 1976 was seeing the enterprise as a "economical reality" and was declaring that "an enterprise must see its fate linked to the notion of property." This jurisprudential approach as well as the judicial practice under the 1967 regime gave rise to the elaboration of the 1985 French insolvency statute.196
p.764.197
A.Belcher, The Economic Implications of Attempting to Rescue Companies, in H.Rajak [ed] 1991, p.236.198
Flood et.al 1995, p.36.199
Calculating Corporate Failure,p.51.