Paterson, Sarah 
ORCID: 0000-0002-7862-4919
(2021)
The analytical boundary between corporate reorganisation and sale in corporate bankruptcy theory.
In: Omar, Paul J. and Gant, Jennifer L.L., (eds.)
Research Handbook on Corporate Restructuring.
Research Handbooks in Private and Commercial Law.
Edward Elgar, Cheltenham, UK, 525 - 538.
ISBN 9781786437464
Abstract
Corporate bankruptcy law theory has traditionally drawn a distinction between reorganising the company and selling its business and assets as a going concern. Both involve keeping all, or most, of the business of the company together, to realise a higher value than would be achieved by breaking the business up and selling the assets separately (thus, implicitly, losing the value of the goodwill). But when the company is reorganised its financial liabilities, and sometimes its operations, are restructured, as opposed to selling the business and assets as a going concern to a third party. Thus, we can draw the traditional boundary between corporate reorganisation, on the one hand, and a business sale, on the other. Important battles have been fought between US corporate bankruptcy theorists on this frontier between corporate reorganisation and business sales. At the same time, English corporate bankruptcy scholars have puzzled over its significance, notwithstanding adoption of the analytical distinction by the English legislature in the Enterprise Act 2002 reforms to English corporate bankruptcy law. The argument in this chapter is that the analytical boundary between corporate reorganisation and business sale is too broad in both of these debates, and crowds out more nuanced and more useful boundaries between (i) the treatment of non-financial contracts in a corporate reorganisation and in a sale; and (ii) the allocation of proceeds based on what I will call the intrinsic value of the firm in a corporate reorganisation and the allocation of proceeds based on the current market price for the firm in a sale. The chapter aims to show why these fainter analytical boundaries have more explanatory power for English corporate bankruptcy scholars and why they are of more utility in current US and English corporate bankruptcy reform debates.
| Item Type: | Book Section |
|---|---|
| Official URL: | https://www.e-elgar.com/shop/gbp/research-handbook... |
| Additional Information: | © 2021 The Author |
| Divisions: | Law |
| Subjects: | K Law > K Law (General) H Social Sciences > HG Finance |
| Date Deposited: | 04 Feb 2022 14:00 |
| Last Modified: | 01 Nov 2024 04:40 |
| URI: | http://eprints.lse.ac.uk/id/eprint/113623 |
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