Comparative Analysis of the Informal Pre‐Insolvency Procedures of the UK and France

Abstract

The aim of this paper is to provide a brief overview of the informal pre‐insolvency proceedings available in the UK and France. In addition, the aim is to provide a comparative analysis of the approach taken towards corporate rescue at this early stage by the ‘key players’ in insolvency. In particular, emphasis will be placed on the role of insolvency practitioners and creditors as well as the involvement of the courts in pre‐insolvency restructurings. Finally, the paper considers the effectiveness of the pre‐insolvency mechanisms available in the two jurisdictions and assesses whether or not these promote and encourage a corporate rescue culture. Copyright © 2016 INSOL International and John Wiley & Sons, Ltd. Copyright © 2016 INSOL International and John Wiley & Sons, Ltd

Financial Characteristics of Pre-Moratorium Companies

“…Zhodnocení daného přístupu jakožto i jeho kritiku je možno nalézt v článcích de Weijse et al (2018), Tollenaara (2017) nebo Eidenmüllera (2017). Kastrinou (2016) se také zaměřuje na analýzu procesů probíhajících ještě před samotným insolvenčním řízením, z našeho pohledu i moratorium předchází plně formalizovanému probíhajícímu insolvenčnímu řízení. Dostatečně brzká komunikace zúčastněných stran by mohla zvýšit plynoucí efekty a urychlit řízení, protože jak se ukazuje, tak české firmy často vstupují do insolvenčního řízení naprosto majetkově vyprázdněné (Kislingerová et al, 2013(Kislingerová et al, nebo Čámská, 2013.…”

Forecasting and preventing bankruptcy: A conceptual review

“…The legislation is specifically designed to stimulate managers to become aware of the financial difficulties of the firm at an early stage, and consequently to adopt the necessary measures to recover the position. The legislation regulates three forms of pre-insolvency situations (Kastrinou, 2016): the safeguard-preservation procedure (sauveguarde), the conciliation procedure (conciliation) and the ad hoc mandate (mandate ad hoc).…”

“…The conciliation procedure aims to facilitate the rehabilitation of firms experiencing legal, financial or economic difficulties. While the safeguard procedure requires that firms not be insolvent, the conciliation procedure asks for a more precise requirement: firms can access the conciliation if they have ceased payments for no more than 45 days (Kastrinou, 2016). The Court appoints a conciliator, who supports the management of the troubled firm to negotiate with creditors in order to conclude an agreement, whose primary aim is to guarantee the going concern of the firm.…”

“…The literature has paid comparatively little attention to these timelyintervention procedures: while a large number of studies have investigated models to forecast bankruptcy, early warning systems seem to be underinvestigated. Indeed, scholars have analysed safeguard procedures principally by adopting a judicial perspective (Kastrinou, 2016;Paulus et al, 2015;Tollenaar, 2017), aiming at investigating legal problems (such as the absolute priority rule) rather than the economic and financial implications of the tools being investigated, with a few exceptions (Di Carlo et al, 2009) but focused on specific contexts.…”