GupShup Study
 
  
Legislative Guide on Insolvency Law eBook/ Notes pdf Download
Ravi Chopra

Legislative Guide on Insolvency Law eBook/ Notes pdf Download

Ravi Chopra | 23-Jun-2016 |
Legislative Guide on Insolvency Law ,

Hi friends, here Ravi Chopra uploaded notes for Insolvency Law with title Legislative Guide on Insolvency Law eBook/ Notes pdf Download. You can download this lecture notes, ebook by clicking on the below file name or icon.

Contents

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A. Organization and scope of the Legislative Guide . . . . . . . . . 1
B. Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Part one
DESIGNING THE KEY OBJECTIVES AND STRUCTURE OF
AN EFFECTIVE AND EFFICIENT INSOLVENCY LAW
I. Key objectives of an effective and efficient insolvency law . . . . 9
A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
B. Establishing the key objectives . . . . . . . . . . . . . . . . . . . . . . . . 10
1. Provision of certainty in the market to promote economic
stability and growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2. Maximization of value of assets . . . . . . . . . . . . . . . . . . . . 10
3. Striking a balance between liquidation and reorganization 11
4. Ensuring equitable treatment of similarly situated
creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5. Provision for timely, efficient and impartial resolution
of insolvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6. Preservation of the insolvency estate to allow equitable
distribution to creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7. Ensuring a transparent and predictable insolvency law
that contains incentives for gathering and dispensing
information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
8. Recognition of existing creditor rights and establishment
of clear rules for ranking of priority claims . . . . . . . . . . . 13
9. Establishment of a framework for cross-border insolvency 14
Recommendations 1-5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
C. Balancing the goals and key objectives of an insolvency law 14
Recommendation 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
D. General features of an insolvency law . . . . . . . . . . . . . . . . . . 16
vi
Page
1. Substantive issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2. The structure of an insolvency law . . . . . . . . . . . . . . . . . . 17
3. Relationship between insolvency law and other law . . . . 19
Recommendation 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
II. Mechanisms for resolving a debtor’s financial difficulties . . . . . . 21
A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
B. Voluntary restructuring negotiations . . . . . . . . . . . . . . . . . . . . 21
1. Necessary preconditions . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2. Main processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3. Rules and guidelines for voluntary restructuring . . . . . . . 25
C. Insolvency proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
1. Reorganization proceedings . . . . . . . . . . . . . . . . . . . . . . . . 27
2. Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
D. Administrative processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
III. Institutional framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Part two
CORE PROVISIONS FOR AN EFFECTIVE
AND EFFICIENT INSOLVENCY LAW
I. Application and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . 38
A. Eligibility and jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
1. Eligibility: debtors to be covered by an insolvency law . 38
2. Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Recommendations 8-13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
B. Commencement of proceedings . . . . . . . . . . . . . . . . . . . . . . . . 45
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
2. Commencement standards . . . . . . . . . . . . . . . . . . . . . . . . . 45
3. Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4. Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
5. Procedural issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
6. Debtors with insufficient assets . . . . . . . . . . . . . . . . . . . . . 61
7. Fees for insolvency proceedings . . . . . . . . . . . . . . . . . . . . 63
8. Dismissal of proceedings after commencement . . . . . . . . 63
Recommendations 14-29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
vii
Page
C. Applicable law in insolvency proceedings . . . . . . . . . . . . 67
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
2. Law applicable to the validity and effectiveness of
rights and claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
3. Law applicable in insolvency proceedings: lex fori
concursus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
4. Law applicable in insolvency proceedings: exceptions to
the lex fori concursus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
5. Achieving a balance between the desirability of
exceptions and the goals of insolvency . . . . . . . . . . . . . . 72
Recommendations 30-34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
II. Treatment of assets on commencement of insolvency
proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
A. Assets constituting the insolvency estate . . . . . . . . . . . . . . . . 75
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
2. Assets included in the insolvency estate . . . . . . . . . . . . . . 75
3. Assets excluded from the insolvency estate . . . . . . . . . . . 80
4. Time of constitution of the insolvency estate and
collection of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Recommendations 35-38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
B. Protection and preservation of the insolvency estate . . . . . . . 83
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
2. Protection of the estate by application of a stay . . . . . . . 83
3. Scope of application of the stay . . . . . . . . . . . . . . . . . . . . 84
4. Discretionary or automatic application of the stay . . . . . . 88
5. Time of application of the stay . . . . . . . . . . . . . . . . . . . . . 89
6. Duration of application of the stay . . . . . . . . . . . . . . . . . . 93
7. Extension of the duration of the stay . . . . . . . . . . . . . . . . 94
8. Protection of secured creditors . . . . . . . . . . . . . . . . . . . . . 94
9. Limitation on disposal of assets by the debtor . . . . . . . . . 98
Recommendations 39-51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
C. Use and disposal of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
2. Assets of the insolvency estate . . . . . . . . . . . . . . . . . . . . . 104
3. Third-party-owned assets . . . . . . . . . . . . . . . . . . . . . . . . . . 110
4. Treatment of cash proceeds . . . . . . . . . . . . . . . . . . . . . . . . 111
Recommendations 52-62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
D. Post-commencement finance . . . . . . . . . . . . . . . . . . . . . . . . . . 113
1. Need for post-commencement finance . . . . . . . . . . . . . . . 113
viii
Page
2. Sources of post-commencement finance . . . . . . . . . . . . . . 115
3. Attracting post-commencement finance: providing
priority or security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
4. Authorization for post-commencement finance . . . . . . . . 117
5. Effects of conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
Recommendations 63-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
E. Treatment of contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
2. Automatic termination, acceleration or similar clauses . . 122
3. Continuation or rejection of contracts . . . . . . . . . . . . . . . . 123
4. Leases of land and premises . . . . . . . . . . . . . . . . . . . . . . . 129
5. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
6. General exceptions to the power to continue, reject and
assign contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
7. Post-commencement contracts . . . . . . . . . . . . . . . . . . . . . . 131
Recommendations 69-86 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
F. Avoidance proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
2. Avoidance criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
3. Types of transactions subject to avoidance . . . . . . . . . . . 141
4. Transactions exempt from avoidance actions . . . . . . . . . . 146
5. Effect of avoidance: void or voidable transactions . . . . . 146
6. Establishing the suspect period . . . . . . . . . . . . . . . . . . . . . 147
7. Conduct of avoidance proceedings . . . . . . . . . . . . . . . . . . 148
8. Liability of counterparties to avoided transactions . . . . . . 151
9. Conversion of reorganization to liquidation . . . . . . . . . . . 152
Recommendations 87-99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
G. Rights of set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Recommendation 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
H. Financial contracts and netting . . . . . . . . . . . . . . . . . . . . . . . . 156
Recommendations 101-107 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
III. Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
A. The debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
2. Continued operation of the debtor’s business and the
role of the debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
ix
Page
3. Rights of the debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
4. Obligations of the debtor . . . . . . . . . . . . . . . . . . . . . . . . . 167
5. Debtor’s liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
Recommendations 108-114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
B. The insolvency representative . . . . . . . . . . . . . . . . . . . . . . . . . 174
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
2. Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
3. Selection and appointment of the insolvency
representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
4. Oversight of the insolvency representative . . . . . . . . . . . 178
5. Duties and functions of the insolvency representative . . 178
6. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
7. Remuneration of the insolvency representative . . . . . . . 180
8. Liability of the insolvency representative . . . . . . . . . . . . 183
9. Agents and employees of the insolvency representative 185
10. Review of insolvency representative’s administration . . 185
11. Removal of the insolvency representative . . . . . . . . . . . 186
12. Replacement of the insolvency representative . . . . . . . . 187
Recommendations 115-125 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
C. Creditors: participation in insolvency proceedings . . . . . . . . . 190
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
2. Extent of involvement of creditors in decision-making . 190
3. Mechanisms to facilitate participation . . . . . . . . . . . . . . . 194
4. Creditor meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
5. Matters requiring a vote by creditors . . . . . . . . . . . . . . . 196
6. Creditor committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
7. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202
Recommendations 126-136 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202
D. Party in interest’s right to be heard and to appeal . . . . . . . . 205
1. Right to be heard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
2. Review procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
3. Right of appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
Recommendations 137-138 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
E. Secured creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207
IV. Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
A. The reorganization plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
x
Page
2. Nature or form of a plan . . . . . . . . . . . . . . . . . . . . . . . . . 209
3. Proposal of a reorganization plan . . . . . . . . . . . . . . . . . . 210
4. The plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
5. Approval of a plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
6. Where a proposed plan cannot be approved . . . . . . . . . 225
7. Binding dissenting classes of creditors . . . . . . . . . . . . . . 226
8. Court confirmation of a plan . . . . . . . . . . . . . . . . . . . . . . 226
9. Effect of an approved and, where required, confirmed
plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229
10. Challenges to a plan after court confirmation . . . . . . . . 229
11. Amendment of a plan after approval by creditors . . . . . 230
12. Implementation of a plan . . . . . . . . . . . . . . . . . . . . . . . . . 231
13. Where implementation fails . . . . . . . . . . . . . . . . . . . . . . . 231
14. Conversion to liquidation . . . . . . . . . . . . . . . . . . . . . . . . . 232
Recommendations 139-159 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
B. Expedited reorganization proceedings . . . . . . . . . . . . . . . . . . . 238
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238
2. Creditors typically involved in voluntary restructuring
negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239
3. Proceedings to implement a voluntary restructuring
agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240
Recommendations 160-168 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244
V. Management of proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249
A. Treatment of creditor claims . . . . . . . . . . . . . . . . . . . . . . . . . . 249
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249
2. Submission of creditor claims . . . . . . . . . . . . . . . . . . . . . 249
3. Verification and admission of claims . . . . . . . . . . . . . . . 256
4. Claims not admitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
Recommendations 169-184 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
B. Priorities and distribution of proceeds . . . . . . . . . . . . . . . . . . 266
1. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266
2. Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274
Recommendations 185-193 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275
C. Treatment of corporate groups in insolvency . . . . . . . . . . . . . 276
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276
2. Group responsibility for external debts . . . . . . . . . . . . . . 278
3. Intra-group debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279
xi
Page
VI. Conclusion of proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281
A. Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281
1. Discharge of the debtor in liquidation . . . . . . . . . . . . . . . 281
2. Discharge of debts and claims in reorganization . . . . . . . 284
Recommendations 194-196 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284
B. Closure of proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285
1. Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285
2. Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286
Recommendations 197-198 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286
Annexes
I. Treatment of secured creditors in insolvency proceedings . . . . . . 287
II. Decision of the United Nations Commission on International
Trade Law and General Assembly Resolution 59/40 . . . . . . . . . . 289
III. UNCITRAL Model Law on Cross-Border Insolvency and Guide
to Enactment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293

    Attachment Lists

    If download doesn't start in application like IDM then press Alt + click on download button to start download
  • Legislative Guide on Insolvency Law.pdf (Size: 1440.52KB) Dowland
Share With Friends :  

No any Comment yet!