Document Type
Article
Publication Date
February 2020
Abstract
The decade since the fnancial crisis has witnessed a proliferation of various ‘light touch’ fnancial restructuring techniques in the form of so-called pre-insolvency proceedings. These proceedings inhabit a space on the spectrum of insolvency and restructuring law, somewhere between a pure contractual workout, the domain of contract law, and a formal insolvency or rehabilitation proceeding, the domain of insolvency law. While, to date, international insolvency instruments have tended to defne insolvency proceedings quite expansively, discussion of the cross-border implications of pre-insolvency proceedings has barely begun. The question is whether pre-insolvency proceedings should qualify as proceedings related to insolvency for the purpose of private international law characterization. The risk is overinclusivity of cross-border insolvency law, which, where it is based on universality and unity, might defeat contractual expectations. This article argues, however, that we should be slow to exclude pre-insolvency proceedings from cross-border insolvency law: these proceedings are initiated in the zone of insolvency, their efectiveness depends on a statutory mandate and not purely on private ordering, they interact and intersect with formal proceedings, and can beneft from the unique system developed by cross-border insolvency law. We suggest, though, that modifed universalism (the leading norm of cross-border insolvency) and international insolvency instruments, should, and are able to, adjust to the peculiarities of preinsolvency proceedings to address concerns about inclusivity and accommodate preinsolvency proceedings adequately.
Recommended Citation
Adrian Walters & Irit Mevorach,
The Characterization of Pre-insolvency Proceedings in Private International Law,
21
855
(2020).
Available at:
https://scholarship.kentlaw.iit.edu/fac_schol/976