The author, through the present paper, aims at providing a brief comparative overview of the legal mechanisms most used by commercial entities as remedies for acute financial problems or preventing such a financial state – the judicial reorganization procedure, the bankruptcy procedure, the...

The primary purpose for the doctrine of separate legal personality is to encourage entrepreneurship, by shifting the risks of business failure away from entrepreneurs to creditors and other risk bearers. Unfortunately this doctrine is subject to abuse by corporate controllers, which prompted the...

Covenants are a means to mitigate the agency problems between borrower and lender that are induced by the allocation of cash flow rights in a debt contract. This comment shows that if covenants could be renegotiated without any transaction costs they could be used to induce efficient behaviour...

While credit risk transfer market dramatically increases the complexity of lender's incentive structure and above all reduces the incentives of the bank to monitor debtor, a ‘harsh' bankruptcy environment (as evidenced in the shift from the debtor controlled to creditor controlled...

Creditors, though, are not regarded as the members of a company, yet the role they play in maintaining a company cannot be denied. They are the sole functionaries of the company, in one word. They provide credit to the company for running its business, as without finance a company holds no...

In 2002, a legal reform introduced in India allowed secured creditors to seize and liquidate the defaulter's assets. We study firms' choice between capital and labor in response to these strengthened creditor rights by exploiting variation in their pre-policy proportion of collateralizable...

Exploiting the timing of the 2005-06 Italian bankruptcy law reforms, we disentangle the effects of reorganization and liquidation in bankruptcy on bank financing and firms' investment. A 2005 reform introduces procedures facilitating loan renegotiation. The 2006 reform subsequently strengthens...

Using a sample of banks operating in 24 countries, we provide robust evidence that stronger creditor rights are associated with higher capital adequacy ratios of conventional banks but not of Islamic banks. Such results are more effective on bank core capital, suggesting that bank managers tend...

This article argues that the enforcement in England in Re New Cap Reinsurance Corporation of an Australian monetary judgment rendered under Australian insolvency law does not sit easily with the Foreign Judgments (Reciprocal Enforcement) Act 1933. This is because the Foreign Judgments...