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9789041107435

Rescue of Companies

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  • ISBN13:

    9789041107435

  • ISBN10:

    9041107436

  • Format: Hardcover
  • Copyright: 1998-04-01
  • Publisher: Kluwer Law Intl
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Summary

More and more, company rescue has become a viable alternative to liquidation of a failing company via bankruptcy proceedings. Company rescue seeks to preserve the healthy parts of a company and to put it back on secure footing. Rescue of Companies reports practical experiences on company rescues with particular emphasis on transactional aspects. Drawing on expert experience, The book comprises 24 national reports, including reports from 23 jurisdictions and a General Report which offers a summary of major differences, peculiarities, and common principles arising out of the various jurisdictions. The comparative approach makes this a useful work for those in academia. Practitioners in bankruptcy law, corporate counsel, and businesspeople should also read this work to stay abreast of a growing trend in treating companies that confront financial failure.

Table of Contents

About AIJA lvii(1)
Officers of AIJA lviii(1)
A Word from the Publications Committee lix(2)
Preface lxi(1)
List of Contributors lxii(8)
Questionnaire lxx
General Report 1(24)
Joren de Wachter
A. Definitions
3(3)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the broadest sense?
3(3)
B. Pre-Insolvency Situation
6(3)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
6(1)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
7(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
7(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
8(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
8(1)
C. Reorganization in General
9(2)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
9(1)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
10(1)
D. Opening Decision
11(7)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice.)
11(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the copmany once the opening decision has been taken?
12(3)
11. In what way does the supervising authority intervene in the reorganization?
15(1)
12. Who will draft and submit the plan to reorganize the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
15(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
16(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
17(1)
E. Adoption and Implementation of the Reorganization
18(4)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
18(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
18(2)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
20(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
20(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
21(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
21(1)
F. Publicity
22(1)
21. What publicity rules are applicable to the different stages described above?
22(1)
G. Transnational Reorganization
22(3)
22. Describe the transnational effects of a reorganization.
22(3)
Australia 25(20)
Mitchell Mathas
A. Definitions
27(2)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the broadest sense?
27(2)
B. Pre-Insolvency Situation
29(4)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
29(1)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
30(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
30(2)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
32(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
33(1)
C. Reorganization in General
33(1)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
33(1)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
34(1)
D. Opening Decision
34(5)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice.)
34(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
35(1)
11. In what way does the supervising authority intervene in the reorganization?
36(1)
12. Who will draft and submit the plan to reorganize the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
36(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
37(1)
14(a) With whom do you deal as a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point?
38(1)
14(b) As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
38(1)
E. Adoption and Implementation of the Reorganization
39(4)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
39(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business and the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
39(1)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
40(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
41(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
42(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
43(1)
F. Publicity
43(1)
21. What publicity rules are applicable to the different stages described above?
43(1)
G. Transnational Reorganization
44(1)
22. Describe the transnational effects of a reorganization.
44(1)
Austria 45(12)
Christoph Liebscher
A. Definitions
47(1)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the broadest sense?
47(1)
B. Pre-Insolvency Situation
48(2)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
48(1)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
49(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
49(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
49(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
50(1)
C. Reorganization in General
50(1)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
50(1)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
51(1)
D. Opening Decision
51(3)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice.)
51(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
51(1)
11. In what way does the supervising authority intervene in the reorganization?
52(1)
12. Who will draft and submit the plan to reorganize the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
52(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
53(1)
14. As an adviser to the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
53(1)
E. Adoption and Implementation of the Reorganization
54(2)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
54(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
54(1)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
54(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
54(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
55(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
55(1)
F. Publicity
56(1)
21. What publicity rules are applicable to the different stages described above?
56(1)
G. Transnational Reorganization
56(1)
22. Describe the transnational effects of a reorganization.
56(1)
Belgium 57(36)
Nicole Van Ranst
A. Definitions
59(1)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the broadest sense?
59(1)
B. Pre-Insolvency Situation
60(7)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
60(4)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
64(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
64(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
65(2)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
67(1)
C. Reorganization in General
67(3)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
67(2)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
69(1)
D. Opening Decision
70(9)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice.)
70(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
71(2)
11. In what way does the supervising authority intervene in the reorganization?
73(1)
12. Who will draft and submit the plan to reorganization the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period o time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
73(4)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
77(1)
14(a) With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point?
78(1)
14(b) As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or group of persons who have to approve the transaction?
78(1)
E. Adoption and Implementation of the Reorganization
79(4)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
79(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
79(1)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
80(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
81(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
82(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
82(1)
F. Publicity
83(1)
21. What publicity rules are applicable to the different stages described above?
83(1)
G. Transnational Reorganization
83(1)
22. Describe the transnational effects of a reorganization.
83(1)
Addendum as a Result of a New Law on Bankruptcies
84(9)
Canada 93(16)
Jeffrey R. Lloyd
Gwen Chamberlain
Ginette Leclerc
A. Definitions
95(1)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the broadest sense?
95(1)
B. Pre-Insolvency Situation
96(3)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
96(1)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
97(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
97(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
98(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
99(1)
C. Reorganization in General
99(1)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
99(1)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
100(1)
D. Opening Decision
100(4)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice.)
100(2)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
102(1)
11. In what way does the supervising authority intervene in the reorganization?
102(1)
12. Who will draft and submit the plan to reorganize the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
102(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
103(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
103(1)
E. Adoption and Implementation of the Reorganization
104(3)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
104(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
104(1)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
105(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
106(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
106(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
106(1)
F. Publicity
107(1)
21. What publicity rules are applicable to the different stages described above?
107(1)
G. Transnational Reorganization
108(1)
22. Describe the transnational effects of a reorganization
108(1)
Denmark 109(24)
Christian D. Lundgren
A. Definitions
111(1)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the broadest sense?
111(1)
B. Pre-Insolvency Situation
112(5)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
112(1)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
113(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
114(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
115(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
116(1)
C. Reorganization in General
117(2)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
117(2)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
119(1)
D. Opening Decision
119(5)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice.)
119(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution of the pursuit of creditors towards the company once the opening decision has been taken?
120(2)
11. In what way does the supervising authority intervene in the reorganization?
122(1)
12. Who will draft and submit the plan to reorganize the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
122(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
123(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
123(1)
E. Adoption and Implementation of the Reorganization
124(6)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
124(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
124(2)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
126(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
127(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
128(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
129(1)
F. Publicity
130(1)
21. What publicity rules are applicable to the different stages described above?
130(1)
G. Transnational Reorganization
130(3)
22. Describe the transnational effects of a reorganization.
130(3)
England and Wales 133(24)
Christopher Mallon
A. Definitions
135(1)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the broadest sense?
135(1)
B. Pre-Insolvency Situation
136(5)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
136(2)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
138(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
139(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
139(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
140(1)
C. Reorganization in General
141(1)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
141(1)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
141(1)
D. Opening Decision
141(6)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice.)
141(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
142(2)
11. In what way does the supervising authority intervene in the reorganization?
144(1)
12. Who will draft and submit the plan to reorganize the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
144(2)
13. With in what period of time from the opening decision has the reorganization plan to be presented?
146(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
147(1)
E. Adoption and Implementation of the Reorganization
147(5)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
147(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
148(1)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
149(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
150(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
150(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
151(1)
F. Publicity
152(1)
21. What publicity rules are applicable to the different stages described above?
152(1)
G. Transnational Reorganization
153(1)
22. Describe the transnational effects of a reorganization
153(1)
Appendix 1: Insolvency Act 1986 s. 8(3)
154(1)
Appendix 2: Insolvency Act 1986 s. 8(1)
154(1)
Appendix 3: Insolvency Act 1986 Schedule 1--Powers of the Administrator or Receiver
155(1)
Appendix 4: Countries to which s. 426 applies
156(1)
Finland 157(18)
Pekka Jaatinen
A. Definitions
159(1)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to described a reorganization in the broadest sense?
159(1)
B. Pre-Insolvency Situation
160(3)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
160(1)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
161(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
161(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
162(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
163(1)
C. Reorganization in General
163(1)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
163(1)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
163(1)
D. Opening Decision
164(6)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice.)
165(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
166(1)
11. In what way does the supervising authority intervene in the reorganization?
167(1)
12. Who will draft and submit the plan to reorganization the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
168(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
169(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
169(1)
E. Adoption and Implementation of the Reorganization
170(3)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
170(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
170(1)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
171(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
171(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
172(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
172(1)
F. Publicity
173(1)
21. What publicity rules are applicable to the different stages described above?
173(1)
G. Transnational Reorganization
173(2)
22. Describe the transnational effects of a reorganization.
173(2)
France 175(30)
Alain Cohen-Boulakia
Paul de Dree
A. Definitions
177(2)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the broadest sense?
177(2)
B. Pre-Insolvency Situation
179(4)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
179(1)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
180(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
180(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
181(2)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
183(1)
C. Reorganization in General
183(2)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
183(2)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
185(1)
D. Opening Decision
185(8)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice.)
185(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
186(3)
11. In what way does the supervising authority intervene in the reorganization?
189(1)
12. Who will draft and submit the plan to reorganize the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
190(2)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
192(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
192(1)
E. Adoption and Implementation of the Reorganization
193(8)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
193(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
194(3)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
197(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
198(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
199(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
199(2)
F. Publicity
201(1)
21. What publicity rules are applicable to the different stages described above?
201(1)
G. Transnational Reorganization
202(3)
22. Describe the transnational effects of a reorganization.
202(3)
Germany 205(24)
Arndt Stengel
Volker Kammel
A. Definitions
207(1)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the broadest sense?
207(1)
B. Pre-Insolvency Situation
208(9)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
208(4)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
212(1)
4. What legal concerns will any new investor have when providing finance to company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable pref- erences)?
213(2)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
215(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
216(1)
C. Reorganization in General
217(2)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set or rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
217(1)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
218(1)
D. Opening Decision
219(5)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice.)
219(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
220(1)
11. In what way does the supervising authority intervene in the reorganization?
221(1)
12. Who will draft and submit the plan to reorganize the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
222(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
223(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
223(1)
E. Adoption and Implementation of the Reorganization
224(3)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
224(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
224(1)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
225(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
225(1)
19. If a Potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
226(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
226(1)
F. Publicity
227(1)
21. What publicity rules are applicable to the different stages described above?
227(1)
G. Transnational Reorganization
227(2)
22. Describe the transnational effects of a reorganization.
227(2)
Hungary 229(14)
Peter Nogradi
A. Definitions
231(1)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the br- broadest sense?
231(1)
B. Pre-Insolvency Situation
232(2)
2. What options are available to the management of a company in financial difficulties (in pre-insolvency situation)?
232(1)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
233(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
233(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
233(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
234(1)
C. Reorganization in General
234(1)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name and code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
234(1)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
234(1)
D. Opening Decision
235(3)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice.)
235(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
236(1)
11. In what way does the supervising authority intervene in the reorganization?
236(1)
12. Who will draft and submit the plan to reorganize the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
236(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
237(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
238(1)
E. Adoption and Implementation of the Reorganization
238(2)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
238(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
238(1)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
239(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
239(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
240(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
240(1)
F. Publicity
240(1)
21. What publicity rules are applicable to the different stages described above?
240(1)
G. Transnational Reorganization
241(2)
22. Describe the transnational effects of a reorganization.
241(2)
Ireland 243(22)
Bill Holohan
A. Definitions
245(2)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the broadest sense?
245(2)
B. Pre-Insolvency Situation
247(5)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
247(1)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
248(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
248(2)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
250(2)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
252(1)
C. Reorganization in General
252(1)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statues?
252(1)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
253(1)
D. Opening Decision
253(7)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice.)
253(2)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
255(2)
11. In what way does the supervising authority intervene in the reorganization?
257(1)
12. Who will draft and submit the plan to reorganize the business? What are the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
258(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
259(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
259(1)
E. Adoption and Implementation of the Reorganization
260(3)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
260(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
261(1)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
261(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
262(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? Is such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
262(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
263(1)
F. Publicity
263(1)
21. What publicity rules are applicable to the different stages described above?
263(1)
G. Transnational Reorganization
264(1)
22. Describe the transnational effects of a reorganization.
264(1)
Italy 265(14)
Cecilia Ghittoni
A. Definitions
268(1)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the broadest sense?
268(1)
B. Pre-Insolvency Situation
268(2)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
268(1)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
269(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable pre preferences)?
269(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
270(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
270(1)
C. Reorganization in General
270(2)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
270(2)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
272(1)
D. Opening Decision
272(3)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice.)
272(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
272(1)
11. In what way does the supervising authority intervene in the reorganization?
273(1)
12. Who will draft and submit the plan to reorganize the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
273(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
274(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are Classes of creditors treated differently at this points? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
274(1)
E. Adoption and Implementation of the Reorganization
275(2)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
275(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
275(1)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
276(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
276(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
276(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effect of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
277(1)
F. Publicity
277(1)
21. What publicity rules are applicable to the different stages described above?
277(1)
G. Transnational Reorganization
277(2)
22. Describe the transnational effects of a reorganization.
277(2)
Liechtenstein 279(16)
Andres Batliner
A. Definitions
281(1)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the br- adest sense?
281(1)
B. Pre-Insolvency Situation
282(1)
2. What options are available to the management of a company in financial difficulties (in pre-insolvency situation)?
282(1)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
282(1)
4. What legal concerns will any new investor have when providing finance to a company in pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
282(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
282(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
283(1)
C. Reorganization in General
283(1)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
283(1)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
284(1)
D. Opening Decision
284(4)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice)
284(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
285(1)
11. In what way does the supervising authority intervene in the reorganization?
286(1)
12. Who will draft and submit the plan to reorganize the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
286(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
287(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
287(1)
E. Adoption and Implementation of the Reorganization
288(2)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
288(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
288(1)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
288(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
289(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
289(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
289(1)
F. Publicity
290(1)
21. What publicity rules are applicable to the different stages described above?
290(1)
G. Transnational Reorganization
290(2)
22. Describe the transnational effects of a reorganization.
290(2)
Appendix 1: Special Provisions for Banks
292(1)
Appendix 2: Special Provisions for Bond Debtors
293(2)
Mexico 295(18)
Alejandro Staines
A. Definitions
297(1)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the broadest sense?
297(1)
B. Pre-Insolvency Situation
298(2)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
298(1)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
298(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
299(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
299(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
300(1)
C. Reorganization in General
300(1)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
300(1)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
301(1)
D. Opening Decision
301(7)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice.)
301(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
302(1)
11. In what way does the supervising authority intervene in the reorganization?
303(1)
12. Who will draft and submit the plan to reorganize the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
304(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
305(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
306(2)
E. Adoption and Implementation of the Reorganization
308(3)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
308(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
308(1)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
309(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
309(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is danger that the whole business will fall apart?
310(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
310(1)
F. Publicity
311(1)
21. What publicity rules are applicable to the different stages described above?
311(1)
G. Transnational Reorganization
311(2)
22. Describe the transnational effects of a reorganization.
311(2)
Netherlands 313(16)
Erik Limpens
A. Definitions
315(1)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the broadest sense?
315(1)
B. Pre-Insolvency Situation
316(3)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
316(1)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
316(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
317(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
317(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
318(1)
C. Reorganization in General
319(1)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
319(1)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
319(1)
D. Opening Decision
320(4)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice.)
320(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
320(2)
11. In what way does the supervising authority intervene in the reorganization?
322(1)
12. Who will draft and submit the plan to reorganize the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
323(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
323(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
324(1)
E. Adoption and Implementation of the Reorganization
324(3)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
324(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
324(1)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
325(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
326(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
326(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
327(1)
F. Publicity
327(1)
21. What publicity rules are applicable to the different stages described above?
327(1)
G. Transnational Reorganization
327(2)
22. Describe the transnational effects of a reorganization.
327(2)
Peru 329(12)
Luis Carlos Rodrigo Prado
A. Definitions
331(1)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the
broadest sense?
331(1)
B. Pre-Insolvency Situation
332(1)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
332(1)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
332(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
332(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
333(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
333(1)
C. Reorganization in General
333(1)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
333(1)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or audiors) to rescue the business?
333(1)
D. Opening Decision
334(4)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and ther person appointed for the reorganization if this is not the management? (Point out the differences between theory and practice).
334(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
335(1)
11. In what way does the supervising authority intervene in the reorganization?
335(1)
12. Who will draft and submit the plan to reorganize the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
336(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
336(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transanction?
337(1)
E. Adoption and Implementation of the Reorganization
338(2)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
338(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
338(1)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
338(1)
18. What will be the effect of the adoption of the plan and the acquisition on the right of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
339(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
339(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
339(1)
F. Publicity
340(1)
21. What publicity rules are applicable to the different stages described above?
340(1)
G. Transnational Reorganization
340(1)
22. Describe the transnational effects of a reorganization.
340(1)
Poland 341(12)
Leslaw Kostorkiewicz
A. Definitions
343(1)
1. What is the meaning of the term reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the bro- adest sense?
343(1)
B. Pre-Insolvency Situation
344(2)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
344(1)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
344(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
344(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
345(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in pre-insolvency situation?
345(1)
C. Reorganization in General
346(1)
7. Does your jurisdiction have any procedure enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or set of rules. Does your jurisd- iction recognize any similar procedure that is not contained in the statutes?
346(1)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
346(1)
D. Opening Decision
346(3)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the differences between theory and practice.)
346(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
347(1)
11. In what way does the supervising authority intervene in the reorganization?
347(1)
12. Who will draft and submit the plan to reorganization the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears the such fees and expenses?
347(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
348(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an advisor of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
348(1)
F. Adoption and Implementation of the Reorganization
349(2)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
349(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
349(1)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
349(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, of the existing collateral?
350(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
350(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
350(1)
F. Publicity
351(1)
21. What publicity rules are applicable to the different stages described above?
351(1)
G. Transnational Reorganization
352(1)
22. Describe the transnational effects of a reorganization.
352(1)
Portugal 353(20)
Miguel de Avillez-Pereira
A. Definitions
355(2)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the br- broadest sense?
355(2)
B. Pre-Insolvency Situation
357(5)
2. What options are available to the management of a company in financial difficulties (in pre-insolvency situation)?
357(3)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
360(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
360(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
361(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
361(1)
C. Reorganization in General
362(1)
7. Does you jurisdiction have any procedures enebling a company in financial difficulties to arrange its reorganization under the control of an authority other than an reorganization uner the control of an authority other than an insolvency procedure or diction recongnize any similar procedure that is not contained in the statutes?
362(1)
8. It is appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
362(1)
D. Opening Decision
363(3)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the differences between theory and practice.)
363(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
364(1)
11. In what way does the supervising authority intervene in the reorganization?
364(1)
12. Who will draft and submit the plan to reorganization the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
364(2)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
366(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
366(1)
E. Adoption and Implementation of the Reorganization
366(4)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
366(1)
16. Describe briefly the procedure to adoupt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
367(2)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? Is so, please describe it.
369(1)
18. What will be the effect of the adoption of the plan and the acquisition of the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
369(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
370(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
370(1)
F. Publicity
370(1)
21. What publicity rules are applicable to the different stages described above?
370(1)
G. Transnational Reorganization
371(2)
22. Describe the transnational effects of a reorganization.
371
Scotland 373(18)
Norman M. Martin
A. Definitions
375(1)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the broadest sense?
375(1)
B. Pre-Insolvency Situation
376(6)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
376(2)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
378(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
379(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
380(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
381(1)
C. Reorganization in General
382(1)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
382(1)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
382(1)
D. Opening Decision
382(4)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice).
382(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
383(1)
11. In what way does the supervising authority intervene in the reorganization?
384(1)
12. Who will draft and submit the plan to reorganize the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
385(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
385(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
386(1)
E. Adoption and Implementation of the Reorganization
386(2)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
386(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
387(1)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
387(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
387(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
388(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
388(1)
F. Publicity
388(1)
21. What publicity rules are applicable to the different stages described above?
388(1)
G. Transnational Reorganization
389(1)
22. Describe the transnational effects of a reorganization.
389(1)
Conclusion
389(2)
Spain 391(22)
Coloma Armero
A. Definitions
393(1)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the broadest sense?
393(1)
B. Pre-Insolvency Situation
394(5)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
394(1)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
395(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
395(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
396(2)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
398(1)
C. Reorganization in General
399(1)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
399(1)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
400(1)
D. Opening Decision
400(8)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice.)
400(2)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
402(2)
11. In what way does the supervising authority intervene in the reorganization?
404(1)
12. Who will draft and submit the plan to reorganize the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
405(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
405(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
406(2)
E. Adoption and Implementation of the Reorganization
408(5)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
408(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
408(1)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
408(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
409(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
410(3)
Sweden 413(16)
Mikael Karlsson
A. Definitions
415(1)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the broadest sense?
415(1)
B. Pre-Insolvency Situation
416(3)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
416(1)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
417(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
417(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
418(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
418(1)
C. Reorganization in General
419(2)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
419(1)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
420(1)
D. Opening Decision
421(4)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice.)
421(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
422(1)
11. In what way does the supervising authority intervene in the reorganization?
423(1)
12. Who will draft and submit the plan to reorganize the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on the fees and expenses of this person and normally bears such fees and expenses?
423(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
424(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
424(1)
E. Adoption and Implementation of the Reorganization
425(2)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
425(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
425(1)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
426(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
426(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
426(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
426(1)
F. Publicity
427(1)
21. What publicity rules are applicable to the different stages described above?
427(1)
G. Transnational Reorganization
427(2)
22. Describe the transnational effects of a reorganization.
427(2)
Switzerland 429(22)
Vincent Jeanneret
A. Notions
431(3)
1. Le champ d'application des regles prevues dans le CO
432(1)
2. Le champ d'application des regles de la LPDF
432(1)
3. Concordat extrajudiciaire
433(1)
4. Conclusion
434(1)
B. Les mesures d'assainissement
434(6)
1. Les cas des pertes en capital
434(1)
2. Le cas du surendettement
435(2)
3. La responsabilite du Conseil d'Administration
437(1)
4. Les mesures d'assainissement
437(3)
C. Le sursis concordataire
440(3)
1. La requete de sursis
440(1)
2. Le sursis provisiore
440(1)
3. L'octroi du sursis concordataire
440(1)
4. Les effets du sursis
441(1)
5. Les pouvoirs du commissaire
442(1)
D. Adoption et homologation du concordat
443(3)
1. L'assemblee des creanciers
443(1)
2. L'homologation du concordat
444(2)
E. L'execution du concordat
446(1)
1. Du concordat dividende
446(1)
2. Du concordat par abandon d'actifs
446(1)
F. Les regles de publicite
447(1)
G. Les aspects internationaux
448(3)
United States 451(16)
Richard E. Mendales
A. Definitions
453(1)
1. What is the meaning of the terms reorganization, restructuring and insolvency? What are the corresponding terms in the language of your jurisdiction? Are any of these terms legally defined? Are other terms used to describe a reorganization in the broadest sense?
453(1)
B. Pre-Insolvency Situation
454(4)
2. What options are available to the management of a company in financial difficulties (in a pre-insolvency situation)?
454(1)
3. In the case of a voluntary arrangement with creditors, what do you have to do as a lawyer for the company to persuade creditors to agree to the arrangement? Do you as a lawyer have specific liabilities in such a situation?
455(1)
4. What legal concerns will any new investor have when providing finance to a company in a pre-insolvency situation (eg continuation of banking facilities, security, continuity of commercial contracts with customers and suppliers, danger of voidable preferences)?
456(1)
5. Describe briefly the duties and potential liabilities of the management in a potential insolvency situation.
457(1)
6. Under what circumstances is the approval of the shareholders required for the management to act in a pre-insolvency situation?
457(1)
C. Reorganization in General
458(1)
7. Does your jurisdiction have any procedures enabling a company in financial difficulties to arrange its reorganization under the control of an authority other than an insolvency procedure or liquidation? Name the code or the set of rules. Does your jurisdiction recognize any similar procedure that is not contained in the statutes?
458(1)
8. Is it appropriate to retain special advisers other than lawyers (eg special business consultants or auditors) to rescue the business?
458(1)
D. Opening Decision
458(3)
9. At which point are the management powers effectively suspended or restricted? What are the powers of the person appointed to manage the reorganization? How are the powers divided between the management of the company and the person appointed for the reorganization if this is not the management? (Point out the difference between theory and practice.)
458(1)
10. What is the effect of the opening decision on the creditors, employees and shareholders? Is there an individual or collective stay of execution preventing the creditors from pursuing the company once the opening decision has been taken?
459(1)
11. In what way does the supervising authority intervene in the reorganization?
459(1)
12. Who will draft and submit the plan to reorganize the business? What is the title of the person appointed to manage the reorganization of the business? To which profession does that person belong? Who appoints such a person? For what period of time? Who controls or supervises this person? What are his/her most important duties? Who decides on fees and expenses of this person and normally bears such fees and expenses?
459(1)
13. Within what period of time from the opening decision has the reorganization plan to be presented?
460(1)
14. With whom do you deal if you are representing a potential acquirer after the opening decision? Who has the power to enter into a valid and binding agreement? Are classes of creditors treated differently at this point? As an adviser of the potential acquirer of the business, is it appropriate to contact and to negotiate with all persons or groups of persons who have to approve the transaction?
460(1)
E. Adoption and Implementation of the Reorganization
461(4)
15. Is it normal during the reorganization procedure for the banks to provide fresh money to continue the operation of the business for a limited period of time during which the acquisition of the business can be negotiated?
461(1)
16. Describe briefly the procedure to adopt the plan to reorganize the business, the authorizations required for its adoption, and the rights and duties of creditors and shareholders.
461(2)
17. What will be the effect of the reorganization on the legal entity of the business? Is there a formal procedure for a third party to acquire the business? If so, please describe it.
463(1)
18. What will be the effect of the adoption of the plan and the acquisition on the rights of other concerned parties (employees, suppliers, etc.)? What is the situation of the banks, and of the existing collateral?
463(1)
19. If a potential acquirer offers to acquire the business of the company, is the person entitled to dispose of such a business required to look for alternative offers? If such a duty exists generally, does this duty continue if soliciting offers would be too lengthy and if there is a danger that the whole business will fall apart?
464(1)
20. Who implements the reorganization plan? Who supervises its implementation? What are the effects of the implementation and its supervision on the powers of the management of the business? What sanctions and remedies are available?
464(1)
F. Publicity
465(1)
21. What publicity rules are applicable to the different stages described above?
465(1)
G. Transnational Reorganization
465(2)
22. Describe the transnational effects of a reorganization.
465(2)
United States: The Perspective of the Venture Capital Adviser 467(20)
James Y. Rayis
1. Introduction
469(5)
A. The predatory "rescue" or: with friends like these who needs creditors
469(1)
B. Organizational considerations of failing entities
470(1)
C. Protecting clients from "preference" rules
471(1)
D. The continuing need for diligence
472(1)
E. Taxation issues: deducting the cost of investing versus acquiring
473(1)
II. Pre-Insolvency Agreements
474(6)
A. Financing techniques
474(3)
B. Control through minority ownership
477(2)
C. The hammer of involuntary liquidation
479(1)
III. Reorganization Issues
480(4)
A. Agreements with reorganizing entities
480(2)
B. Deals with the creditors' committees
482(2)
IV. Making a Clean Break: Running Free from Liabilities
484(1)
V. Conclusion
484(3)
Index 487

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