Resolution of Financial Distress An International Perspective on the Design of Bankruptcy Laws

by Djankov, Simeon; Claessens, Constantijn A.; Mody, Ashoka

• ISBN13: 9780821349069
• ISBN10: 0821349066
• Format: Paperback
• Copyright: 2001-06-01
• Publisher: World Bank Publications

Summary

This book focuses on the principles of and practical approaches to addressing the public policy trade-off involved in systemic corporate and financial sector crises and the lessons learned from the changes taking place in bankruptcy frameworks around the world. It includes research on recent public policy initiatives for distress resolution or market-based restructuring.

Table of Contents

Foreword	vii
Contributors	ix
Resolution of Financial Distress: An Overview	xv
Stijn Claessens
Simeon Djankov
Ashoka Mody
Insolvency Regimes: Current Interest and Principles	xvii
Systemic Distress and Corporate Restructuring	xxii
Conclusions	xxx
References	xxxi
Bankruptcy Laws: Basic Economic Principles	1	(24)
Joseph E. Stiglitz
Key Principles	2	(5)
Efficiency and Incentive Issues	7	(6)
Seller Beware	13	(1)
Implications for Policy	13	(3)
The Theory of Systemic Bankruptcy	16	(5)
Conclusion	21	(1)
References	22	(3)
Bankruptcy Procedures in Countries Undergoing Financial Crises	25	(22)
Michelle J. White
Economic Issues in Corporate Bankruptcy	25	(14)
Bankruptcy and Entrepreneurial Activity	39	(4)
Conclusion	43	(1)
References	43	(4)
Systemic Corporate Distress: A Legal Perspective	47	(18)
Jay Lawrence Westbrook
The Reform Movement	48	(2)
Elements of Reform	50	(8)
Special Rules for Systemic Distress	58	(2)
Cross-Desciplinary Research	60	(3)
References	63	(2)
Creditor Protection and Bankruptcy Law Reform	65	(26)
Rafael La Porta
Florencio Lopez-de-Silanes
Content of Bankruptcy Laws around the World	66	(6)
Enforcement of Laws around the World	72	(4)
Consequences of Creditor Protection in Financial Markets	76	(2)
Real Consequences of Creditor Protection	78	(2)
Reforming Bankruptcy Procedures	80	(5)
Conclusion	85	(1)
Appendix 4A. Definitions of Variables	86	(2)
References	88	(3)
Corporate Debt Restructuring: Auctions Speak Louder Than Words	91	(16)
Donald B. Hausch
S. Ramachandran
Market-Based Bankruptcy	94	(1)
The Proposed ACCORD	95	(2)
Implementing ACCORD	97	(5)
Additional Considerations	102	(3)
Conclusion	105	(1)
References	105	(2)
Alphatec Electronics PCL	107	(42)
Perry Fagan
C. Fritz Foley
Stuart Gilson
History of Alphatec Electronics and the Alphatec Group	109	(4)
Alphatec in Distress	113	(15)
The First Restructuring Plan	128	(6)
The New Thai Bankruptcy Law	134	(2)
The Rehabilitation Plan	136	(9)
Postscript	145	(4)
Corporate Debt Restructuring in a Systemic Financial Crisis: Mexico's Experience, 1996-98	149	(18)
Alberto Mulas
Fondo Bancario de Protecction al Ahorro
Corporate Debt Restructuring, 1995-97	151	(9)
FOBAPROA's Role as a Restructuring Agent through its Corporate Asset Recovery Unit	160	(4)
Key Lessons from Mexico's 1996-98 Restructuring Experience	164	(3)
Reconstruction Finance Corporation Assistance to Financial Intermediaries and Commercial and Industrial Enterprises in the United States, 1932-37	167	(38)
Joseph R. Mason
RFC Background: Politics, Funding, and Operations	168	(4)
RFC Assistance to Financial Institutions and Commercial and Industrial Enterprises	172	(29)
Summary and Conclusions	201	(1)
References	202	(3)
Japan Confronts Corporate Restructuring	205	(24)
Arthur J. Alexander
The Case for Restructuring	206	(5)
Managing Financial Distress	211	(90)
Conclusions	301
References	227	(2)
Financial Restructuring in East Asia: Halfway There?	229	(32)
Stijn Claessens
Simeon Djankov
Daniela Klingebiel
Was the East Asian Crisis Unique?	229	(1)
East Asian Crisis: Similar Origins to Previous Crises, but Difference in Scale	230	(1)
Steep Decline and Rapid Recovery	230	(13)
Corporate Restructuring Is Gathering Speed	243	(8)
The Risk of an Unsustainable Recovery	251	(7)
References	258	(3)
The Politics of Corporate and Financial Restructuring: A Comparison of Korea, Thailand, and Indonesia	261	(44)
Stephan Haggard
Financial and Corporate Restructuring: Political Issues and Empirical Patterns	263	(5)
Financial and Corporate Restructuring: Political Determinants	268	(3)
Korea	271	(11)
Thailand	282	(10)
Indonesia	292	(9)
Conclusion	301	(1)
References	302	(3)
The Role of Cross-Border Mergers and Acquisitions in Asian Restructuring	305	(36)
Ashoka Mody
Shoko Negishi
Cross-Border M&A: Trends, Motives, and Impacts	306	(8)
East Asian Financial Distress and Rcovery	314	(7)
Cross-Border M&As in East Asian Restructuring	321	(10)
Policy Implications	331	(4)
Conclusion	335	(2)
References	337	(4)
Asset Management Companies	341	(40)
Daniela Klingebiel
The Centralized Versus the Decentralized Approach	342	(4)
The Different Types of Asset Management Companies	346	(3)
Evidence	349	(6)
Lessons from Cross-Country Experience	355	(6)
Appendix 13.A. Main Characteristics of Asset Management Companies	361	(11)
Bibliography and Reference List	372	(9)
Index	381