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Bankruptcy is regulated by articles 437 to 592 of the Commercial Code. Bankruptcy may be initiated by the debtor itself, by the public prosecutor or by a creditor. The procedure applies to a debtor who meets both of the following criteria: (i) not being able to pay due debts; and (ii) not being able to raise credit. The Commercial Chamber of the District Court (court) will appoint a bankruptcy trustee in charge of the bankruptcy and a judge to supervise the proceedings on granting the petition. Its aim is to realise the debtor's assets and pay the creditors through the recovered assets.

The Chinese Enterprise Bankruptcy Law (Bankruptcy Law) sets out three types of bankruptcy proceedings for firms in financial trouble: liquidation, reorganisation, and reconciliation. The debtor or any of its creditors may file for liquidation or reorganisation when the debtor becomes insolvent. Reorganisation may also be commenced if the debtor is in imminent insolvency. Only the debtor itself may file for reconciliation. Reconciliation is a process whereby the debtor renegotiates the terms of its debt with the creditors to reach a reconciliation plan, which will be binding upon all creditors once approved by the creditors' meeting and the court. Reconciliation cases are very rare in practice.

Gilbey Strub of the Association for Financial Markets and Carter McDowell of the Securities Industry and Financial Markets Association discuss global bank resolution and recovery initiatives

Under the existing legal regime, the main procedures of reorganisation and rehabilitation for companies in financial difficulties include schemes for compromise, arrangements and reconstruction under the Companies Act 1956, or revival and rehabilitation under the Sick Industrial Companies (Special Provisions) Act 1985 (SICA).

The Brazilian Bankruptcy and Restructuring Law (BRL) establishes three major mechanisms that may apply to troubled companies: (i) judicial reorganisation proceedings; (ii) out-of-court reorganisation proceedings; and (iii) bankruptcy or forced liquidation. As one of its main features, the BRL offers the corporate debtor flexibility and continuity of management and an opportunity for rehabilitation.

The Insolvency Act 2003 (Act) and the Insolvency Rules 2005 set out the various insolvency proceedings available in the British Virgin Islands (BVI). Although included at Part III of the Act, the administration provisions are not yet in force. The BVI Business Companies Act (BC Act) includes provisions for reorganisation.

The Danish Bankruptcy Act provides for three different juridical insolvency procedures: bankruptcy, restructuring and debt relief. Outside the three judicial insolvency procedures, a variety of non-judicial rescue and reorganisation arrangements can be completed with creditor consent.

Carolyn Campbell, managing director at Emerging Capital Partners, discusses how many of these challenges can be overcome with a local insight

The bank’s purchase of Brazil’s Banco BBM will open up new lines of credit for businesses looking to expand in the struggling Latin American economy

Only one formal collective insolvency procedure exists under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (the Act): liquidation.