The European insolvency game of reorganization of distressed companies
PhD student: Mrs O.M. Falgueras del Álamo
Promotors: Prof A.F. Salomons, Prof R.J. de Weijs
Duration: 1/2/2013 - 31/1/2016
The research aims to present rules for harmonization of the current Member States’ laws on reorganization of distressed or insolvent companies. It will focus on the problems that need to be resolved to provide a harmonized legal instrument that successfully prevents destruction of value caused by lengthy negotiations or opportunistic hold out behaviour during the reorganization process. Furthermore, it will identify which parties should be allowed to participate in that process. The main research question will be the following: What rules are to be formulated to construct a harmonized EU reorganization regime in which effective business rehabilitation is both efficient and protective of shareholders’ interests? The research question will be answered combining two methods: Applied Game Theory and comparative law. The former will provide the efficiency test, and the latter will make us understand how efficiency can be balanced with shareholders’ protection and how to strike that balance in view of the main goal of reorganization, being business rehabilitation. Comparative law will also help to create rules that resemble existing and accepted legislations. Moreover, the comparative law study will be able to query on how the problems associated to reorganization are solved under the different jurisdictions to create not only a harmonized rule, but also a better rule.