A Comparison of US, UK, and German Insolvency Codes

This paper describes three insolvency codes, those of the United Kingdom (UK), Germany, and the United States (US) and compares their efficiency against a number of benchmarks. These codes have been chosen because they cover a broad spectrum of debtor- and creditor-oriented insolvency procedures. Th...

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Bibliographic Details
Published in:Financial management 1996-10, Vol.25 (3), p.86-101
Main Authors: Franks, Julian R., Nyborg, Kjell G., Torous, Walter N.
Format: Article
Language:English
Subjects:
Bankruptcy
Bankruptcy Code
Bankruptcy law
Bankruptcy laws
Bankruptcy reorganization
Business liquidation
Business structures
Codes
Comparative studies
Costs
Creditor claims
Creditors
Creditors rights
Debt
Efficiency
Financial management
Going concerns
Insolvency
International aspects
Legislation
Manycountries
Receivership
Secured creditors
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Summary:This paper describes three insolvency codes, those of the United Kingdom (UK), Germany, and the United States (US) and compares their efficiency against a number of benchmarks. These codes have been chosen because they cover a broad spectrum of debtor- and creditor-oriented insolvency procedures. The paper also compares the plans of distressed firms' reorganizations both within and outside the formal bankruptcy process, including the size of write downs and creditors' claims and the deviations from absolute priority which have accrued both to equityholders and different classes of creditors. Some evidence of the costs of bankruptcy is also provided for each country.
ISSN:0046-3892
1755-053X
DOI:10.2307/3665810