Consumer insolvency in Australia

This paper seeks to identify and assess the features of Australian bankruptcy regulation as they apply to consumer insolvency. Although Australian bankruptcy law makes no explicit recognition of ‘consumer bankruptcy’ as a regulatory target in itself, the Australian legislation nevertheless has a number of features that impact on what would generally be seen to be consumer bankrupts. After providing an outline of the legislative framework within which consumer bankruptcy operates, the paper examines the consumer insolvency aspects of this legislation, together with an assessment of proposed reforms. Some brief comparisons of the ‘consumer’ features of Australian regulation with that of the more fully developed consumer provisions of the Canadian and the United States bankruptcy legislation, are made in order to highlight the Australian position. The Australian Act has historically drawn heavily on English bankruptcy legislation but inevitably Australia has to some extent developed along its own path. Notable is the reasonably vigorous approach to discharge from bankruptcy. The proposed reforms to the Bankruptcy Act, which have followed a detailed consultative process, are largely directed to consumer debtors. Some of these reforms are directed against a perceived debtor abuse of the bankruptcy system. Other reforms, such as increasing the availability of debt agreements, are more generous to insolvent debtors. On the whole the reforms appear to be based more on political than empirical grounds.     

The threat of corporate groups and the insolvency connection

This paper attempts to shed some light on the issue referred to by the term ‘group threat’. The factual appearance of corporate groups will be emphasized, as well as the question of what particular dangers arise from groups of legal entities. It will be argued that the source of group threats lies in the supremacy of group interest over the interests of affiliates, particularly in groups acting as a single unit. However, while efficiency gains inherent in group structures have attracted considerable attention in the debate about the insolvencies of corporate groups, the aspect of how the restriction of group threats can be reconciled with these efficiency‐preservation concepts has been neglected. This appears of some concern given the fact that group threats and group synergy effects are part of the same coin. Both sides of the Janus‐head ought to be considered in insolvency concepts and an attempt will be made to put the specific aspect of group threats into the wider context of group insolvencies. Existing approaches will be introduced, summarized and categorized, with a particular view taken of their common characteristics. It is argued that most insolvency concepts suffer from the same fundamental deficiencies: the focus on the structure of groups, which makes the very nature of integrated companies difficult to grasp. Consequently, this calls into question the application of these concepts and leads, furthermore, to significant collateral damage in the shape of principles central to company law. Resulting from these shortcomings and from the insight that the supremacy of the group interest constitutes the fundamental source of group characteristics, this paper suggests as an alternative that the focus be placed on wrongful conduct, the argument being that it is not the static structure, but the way the group is directed and ruled, which constitutes the decisive criterion for insolvency concepts. The understanding of group threats is therefore the key to a satisfactory approach to group specific challenges in insolvency. Copyright © 2009 John Wiley & Sons, Ltd.     

The legal responses of Canada and Poland to international bankruptcy and insolvency with a focus on cross‐border insolvency law

This article discusses and compares the respective legal responses of Canada and Poland to international bankruptcy and insolvency with a focus on cross‐border insolvency law. Specifically, the issues addressed herein concern jurisdiction, recognition of foreign bankruptcy proceedings, and co‐operation with foreign courts and foreign administrators. Notwithstanding some real differences between Canadian and Polish international insolvency proceedings, both legal regimes may be compared, since both countries have adopted many of the principles contained in the UNICTRAL Model Law on Cross‐Border Insolvency. The major impetus behind the changes established by Canada in its bankruptcy and insolvency laws have been the economic realities produced by the North American Free Trade Agreement. Likewise, Poland's accession to the European Union (EU) has been a major catalyst for revising the Polish Insolvency and Restructuring Act. Part II of the said act is entirely devoted to international insolvencies. However, following Poland's adherence to the EU, those sections of the Polish Insolvency and Restructuring Act that deal with international or cross‐border insolvencies will be severely limited or constrained in scope. The article indicates that Poland, the EU and Canada are taking the necessary steps to meet the needs of debtors who would like to restructure in an international setting. Copyright © 2006 John Wiley & Sons, Ltd.     

Promoting fairness in English insolvency valuation cases

This is the second part of a comprehensive study on fair measurement of value in English insolvency law. The author has already demonstrated in a previous article the importance of posing and responding to questions about fairness in the insolvency process. That article developed a specific framework to measure whether assets and businesses are fairly valued in insolvency and bankruptcy cases. The proposed communitarian, fairness‐oriented framework is based on a modified version of Rawls, Finch and Radin's concepts of fairness. It evidenced that, when assessed against fairness, none of the valuation techniques currently available to the courts are without limitations. Building on the findings of this previous work, this article investigates whether English case law: (i) achieves a fair valuation of the debtor's assets and business; and (ii) protects interested parties (mainly creditors and shareholders) who have realistic prospects of receiving a distribution‐ against unfair harm.