Rethinking the Role of the Law of Corporate Distress in the Twenty-First Century

This paper, originally published as an LSE Law, Society and Economy Working Paper, examines the evolving landscape of corporate distress. It proposes a new classification of this area of law, distinguishing between 'insolvency law' and 'restructuring law'. While the traditional view, as articulated by Thomas Jackson, emphasizes bankruptcy law's role in preventing individual creditors from seizing assets and thus maximizing overall returns, this paper argues that this perspective primarily applies to insolvency law. Restructuring law, on the other hand, is presented as a distinct mechanism focused on facilitating new agreements among stakeholders when a company's existing financial structure is no longer viable but the business itself has potential for continuation. The paper critiques the tendency in some legal systems to conflate these two distinct functions under a single umbrella term. It highlights that the UK legal system, until recently, had a clearer separation, with 'restructuring' emerging as a more defined field. By differentiating between insolvency and restructuring, the paper aims to provide a clearer understanding of how the law facilitates the efficient allocation of capital within the economy. The ultimate goal, for both branches of corporate distress law, is to promote economic growth.

Careers

The paper discusses the legal and economic implications of corporate distress, which are relevant to careers in law, finance, and business.

• Insolvency Practitioner
• Restructuring Advisor
• Corporate Lawyer
• Investment Banker
• Regulator

Frequently asked questions

What is this 'Rethinking the Role of the Law of Corporate Distress' program?

This is a research paper, originally published as an LSE Law, Society and Economy Working Paper, examining the evolving landscape of corporate distress law. It is not an academic degree program.

Are there any tuition fees or living costs associated with this program?

No, as this is a research paper and not a degree program, tuition and living cost information is not applicable. The paper is available for download.

How do I apply for this program?

This document is a research paper and does not require an application process. You can download the paper from the LSE Law, Society and Economy Working Papers archive or the Social Sciences Research Network (SSRN) electronic library.

What are the entry requirements for this program?

There are no direct entry requirements for students as this is a research paper, not a taught program. It is available for public access and download.

What career outcomes are relevant to the content of this paper?

The paper's discussion on corporate distress has implications for careers such as Insolvency Practitioner, Restructuring Advisor, Corporate Lawyer, Investment Banker, and Regulator.