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Explaining the choice between alternative insolvency regimes for troubled companies in the UK and Sweden

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journal contribution
posted on 2006-04-05, 16:58 authored by Gary Cook, Keith Pond
Over the past 20 years UK and Swedish insolvency law has moved in the direction of company rescue rather than enforcing secured creditor priority. However, both countries show a low take up rate of rescue procedures. This paper uses a cost-benefit approach to examine the choices faced by key stakeholders using the now conventional transaction cost paradigm. The paper argues that it is predominantly the ex post indirect and time costs which explain the poor take up of customised rescue procedures. In both countries the ex ante cost of delay in filing also presents a tough challenge not fully addressed by policymakers.

History

School

  • Business and Economics

Department

  • Business

Pages

191868 bytes

Citation

COOK, G. and POND, K., 2006. Explaining the choice between alternative insolvency regimes for troubled companies in the UK and Sweden. European journal of law and economics, 22(1), pp 21-47

Publisher

© Springer-Verlag

Publication date

2006

Notes

This article has been accepted for publication in the journal, European Journal of Law and Economics [© Springer-Verlag] and is also available at: http://www.springerlink.com/openurl.asp?genre=article&eissn=1572-9990&volume=22&issue=1&spage=21.

ISSN

0929-1261

Language

  • en