Corporate Insolvency

Abstract

This chapter discusses the termination of the corporate existence and in particular the issue of corporate insolvency. There are many reasons for ending the corporate existence such as corporate failure, a merger, or formation of the corporation for only a limited period of time which has expired. In all these incidences, corporate law has to provide a process that ensures that pre-existing contractual entitlements are respected in accordance with the idea of creditor preference and shareholder residuarity. The remainder of the chapter discusses the special case of insolvency, in particular concepts of insolvency, the transition regimes from corporate governance to bankruptcy governance, and insolvency and restructuring options under the legal systems under consideration here. It concludes that the rise of the ‘rescue culture’ has resulted in a remarkable convergence of insolvency and restructuring law on both sides of the Atlantic.