As business activity has globalized, troubled companies are more likely to involve assets, operations and financial complications for creditors and other stakeholders that are international in scope. It’s not surprising, therefore, that there is increasing interest in developing global strategies for resolving cross-border corporate crises. But evolving a global approach to corporate distress is a difficult challenge, in part because the bankruptcy codes vary internationally, reflecting fundamental differences in approaches to bankruptcy and attitudes about financial recovery. To those who are not attorneys, accountants or turnaround managers, these differences may not be readily apparent because bankruptcy codes tend to share the same basic priority: to protect creditors’ interests and find ways to keep them “whole.” Jurisdictions tend to differ, however, in their assumptions about the best ways to achieve these goals within acceptable parameters of risk.
The U.S. system, for example, has long been predicated on the notion that rehabilitation, when possible, offers the best prospects for companies that are in distress, unable to pay their debts and forced to seek refuge in bankruptcy protection. There’s a commitment in the United States to explore options for a second chance, in the expectation that creditors’ and other parties’ financial interests will, in the long run, be best protected if a company can be restructured to restore and rebuild its enterprise value and, in so doing, preserve... To read the complete article, login or sign-up using the form below.
Become a premium subscriber today to read this and all MIT Sloan Managmeent Review articles.
Buy this article. Purchase one or more copies of this article in PDF form.
Become a premium subscriber today to read this article and the entire archive of MIT SMR articles.
Upgrade your existing subscription to premium
Sign in if you are a premium subscriber.
Do you subscribe the MIT Sloan Management Review in print? Enter the email address and password you used when ordering. Don't remember? Lookup your subscription account information
- Register for free access to recent articles and the current issue of MIT Sloan Management Review.
- Subscribe and read articles from the past three years online.
- Premium subscription give you access to the entire archive of articles.
