Corporate Rescue and Law Reform in the UK

What is it about?

When companies are insolvent legal regimes can offer appropriate solutions. One possibility is to try to rescue the company, even though this may temporarily affect the rights of the company's creditors. The UK government has published proposals to introduce legislation to facilitate corporate rescue and this article explains and evaluates these proposals.

Featured Image

Photo by Sebastian Grochowicz on Unsplash

Photo by Sebastian Grochowicz on Unsplash

Why is it important?

Corporate insolvency, particularly when of a large corporation, can have an impact going for beyond the company and its creditors. Whilst levels of corporate insolvency have remained reasonably stable in recent years, uncertain times and external shocks may see them rise. If companies can be rescued (and their financial stability secured for the long term) there are clear benefits for the UK economy generally and, potentially, for all stakeholders in the company. However, law reform initiatives should be closely scrutinised to determine whether their objectives are legitimate and likely to be achieved.

Perspectives