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This new book systematically examines the current process for
distressed Micro, Small and Medium Enterprises (MSMEs), and
proposes a different, more appropriate, 'modular' approach to the
treatment of such entities when faced with insolvency proceedings.
MSMEs play a vital role in virtually all global economies. They are
a primary means by which entrepreneurs bring new business
propositions to the market, and deliver a range of products and
services to local economies. MSMEs tend to be more reliant on
favourable legal and regulatory climates to survive and thrive than
larger businesses, and insolvency regimes are often more tailored
to these larger businesses, assuming an extensive insolvency estate
of significant worth, and the presence of creditors and other
concerned stakeholders to participate in and oversee the process.
These assumptions and features are generally incongruous with the
reality of MSMEs, for whom assets are of less value and whose
stakeholders are generally more disinterested. The modular approach
proposed in this book addresses the imbalances, inconsistencies,
and lack of supervision which is often apparent in treatment of
insolvent MSMEs. It provides an overview of existing approaches to
MSME insolvency, the place of MSMEs in the global economy, and the
particular needs of MSMEs in financial distress. It then sets out
the procedural framework, policy objectives, and key components of
the modular approach, detailing how a choice of modules enables
national policy-makers a more flexible process for resolution. It
then outlines the roles, positions, and obligations of key
stakeholder groups, and explains the managerial, administrative,
and judicial functions of this approach. Finally, it explains how
elements of the broader legal system should be aligned with, and
supportive of, the optimal functioning of the modular approach.
Insolvency within multinational enterprise groups (MEGs) raises
complex issues due to the foreign elements of the case and the
multiplicity of debtors. The key problem is deciding to what extent
and in which ways should there be 'linkage' between the entities in
the course of their insolvency in order to promote insolvency
goals. Historically the issue has been neglected both in national
and international regimes. However, new initiatives are currently
developing. In order to deal with this issue the work provides a
theoretical framework, suggesting a balance between
Entity-Enterprise issues (drawn from company law theory and the
problem of enterprise groups) and Universality-Territoriality
issues (drawn from cross-border insolvency and conflict of laws
theory). This is further assisted by a taxonomy describing
prototypical scenarios of MEGs and their insolvency. The
theoretical framework and prototypical scenarios are the basis for
critical analyses of various tools for 'linking' between different
components of MEGs in the course of their insolvency and the degree
to which they fit with a series of insolvency goals. Thus, the book
suggests a comprehensive approach for dealing with insolvency
within MEGs which can be used not only within the current
cross-border insolvency frameworks (e.g., UNCITRAL Model Law, EC
Regulation) but also as a definitive guideline for future reform.
It argues that a global group-wide perspective for MEG insolvencies
can be desirable if its application is limited to appropriate types
of cases where unduly defeat of entity law and territoriality
concerns can be minimized.
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