Asia insolvency regimes
There'll be no Chapter 11, yet
September 01, 2009
A comparison of the corporate-rescue regimes across Asia-Pacific, and an argument that they won't shift to debtor-in-possession soon
Corporate rescue regimes in Asia-Pacific jurisdictions are varied in their approach, focus and procedures. Overall, however, they tend to be creditor driven and externally administered. This is in contrast to the US Bankruptcy Code, Chapter 11. The debtor-in-possession process in Chapter 11 is, as its name suggests, debtor driven and debtor managed. Is there a case for adopting Chapter 11-style reforms in Asia? While there would be some advantages, it is unlikely to happen soon in most countries in Asia-Pacific.
Any comparative discussion of this nature needs to recognise that corporate rescue regimes throughout Asia are not uniform. Australia has a Voluntary Administration (VA) regime in which the administrator is appointed out of court, although in the writer's experience the court's supervisory role is often (perhaps usually) invoked at some point. Singapore has a process of judicial management that requires an appointment of the manager by the court. Hong Kong...
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