Insolvency Law in Times of COVID-19

Gurrea‐Martínez, Aurelio

doi:10.2139/ssrn.3562685

Cited by 10 publications

(5 citation statements)

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“…Schammo (2020) queries if regulatory choices should be more pronounced to be in the overall public interest, such as being more 'precautionary'. In this respect, we observe that there is a lack in precautionary interventions such as moratoria for corporate debt (Eidenmüller, Enriques, and van Zweiten 2020;Gurrea Martínez 2020). At the same time, the relaxation of directors' duties in relation to 'wrongful' trading (Licht 2020) in company and insolvency law, which act in normal times as a controlling lever to prevent directors from wasting corporate assets if a company cannot stave off insolvency, is designed to encourage directors to continue trading.…”

Section: Analysis On Working Capital Disclosurementioning

confidence: 99%

“…Next, businesses are not excluded from payment holidays by regulatory suspension but are instead enrolled into the loan boosting scheme discussed below. It is uncertain if this policy choice is optimal given that commentators (Eidenmüller, Enriques, and Van Zweiten 2020;Gurrea Martínez 2020) advocate the necessity of corporate debt relief in order to prevent seizure in the real economy. Third, efficiency disruptions introduced by regulatory suspension affects market mechanism chains that may in turn adversely affect consumers.…”

Section: A Regulatory Package Aimed At Relief For Borrowersmentioning

confidence: 99%

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Regulatory Suspensions in Times of Crisis: The Challenges of Covid - 19 and Thoughts for the Future

2020

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The Covid-19 crisis in 2020 severely impacted the corporate and in turn, the financial sectors of the UK, entailing responses from financial regulators to implement unprecedented regulatory suspensions that affect both the financial sector and the real economy. We argue that regulatory suspensions are a unique crisis management tool and give rise to certain concerns and implications. We offer two case studies in regulatory suspension that show how inherently flexible laws and regulations became an anchor for unexpected suspensions or adjustments in other regulatory provisions and laws. These create implications for rebalancing of regulatory objectives and distributive effects and also for incentivizing certain behaviours amongst affected constituents. These institutional implications may be temporary or have a longer-term effect, and we argue that there is a need for a robust and rational regulatory decision-making framework in relation to regulatory suspensions, as part of crisis management. We sketch the contours of such a framework which includes rational balancing of the cost and benefits of regulatory objective trade-offs, distributive effects and institutional implications. We advocate a broad and deep 'humanizing' approach to balancing cost and benefit in regulatory suspensions, drawing upon Sunstein's work. We also advocate a coordinated and inclusive procedural approach to crisis management, including regulatory suspension decisions, that would enhance regulators' preparedness and intuitive skill in this area.

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Section: Analysis On Working Capital Disclosurementioning

confidence: 99%

Section: A Regulatory Package Aimed At Relief For Borrowersmentioning

confidence: 99%

Regulatory Suspensions in Times of Crisis: The Challenges of Covid - 19 and Thoughts for the Future

2020

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“…The recent crisis, brought on by the COVID-19 pandemic, highlighted the need for legislative reform to cover restructuring processes. Proposals for the pandemic period included both temporary and permanent measures (Routledge, 2021; Gurrea-Martínez, 2020b). However, once the pandemic can be considered overcome, recommendations are proposed for the improvement of insolvency frameworks focusing on small- and medium-sized companies (Gurrea-Martínez, 2021) or emerging markets (Gurrea-Martínez, 2020c), although in the latter the future development of legislation to promote efficient insolvency frameworks is as important as improving judicial systems and creating a sophisticated body of insolvency practitioners.…”

Section: Literature Reviewmentioning

confidence: 99%

Duty calls: prediction of failure in reorganization processes

Abínzano

Bonilla

Muga

2023

JRF

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PurposeUsing data from business reorganization processes under Act 1116 of 2006 in Colombia during the period 2008 to 2018, a model for predicting the success of these processes is proposed. The paper aims to validate the model in two different periods. The first one, in 2019, characterized by stability, and the second one, in 2020, characterized by the uncertainty generated by the COVID-19 pandemic.Design/methodology/approachA set of five financial variables comprising indebtedness, profitability and solvency proxies, firm age, macroeconomic conditions, and industry and regional dummies are used as independent variables in a logit model to predict the failure of reorganization processes. In addition, an out-of-sample analysis is carried out for the 2019 and 2020 periods.FindingsThe results show a high predictive power of the estimated model. Even the results of the out-of-sample analysis are satisfactory during the unstable pandemic period. However, industry and regional effects add no predictive power for 2020, probably due to subsidies for economic activity and the relaxation of insolvency legislation in Colombia during that year.Originality/valueIn a context of global reform in insolvency laws, the consistent predictive ability shown by the model, even during periods of uncertainty, can guide regulatory changes to ensure the survival of companies entering into reorganization processes, and reduce the observed high failure rate.

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“…Begin by debating whether employing the insolvency system is the best way to handle businesses affected by the coronavirus as reported by Gurrea-Martinez. [10] Seijo [11] examine the barriers that successfully marketed technological advancements encounter to either be manufactured in small batches or at a high-volume manufacturing scale. This is a common Argentinian question.…”

Section: Literature Reviewmentioning

confidence: 99%

Understanding the Social Consequences of Legal Developments in India

Pandey,

Spoorthi

2023

TTASSH

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This scholarly article aims to investigate and assess the societal implications of legal advancements in India. The statement acknowledges the significant impact of law on the formation of societies, the configuration of social frameworks, and the delineation of the entitlements and responsibilities of persons. Through analysing the societal ramifications of legal modifications in India, this research enhances our comprehension of the intricate relationship between law and society within the Indian milieu. The present study utilizes a research methodology that integrates both qualitative and quantitative approaches. A thorough examination of the literature was undertaken to ascertain significant legal advancements and their associated societal ramifications in India. Furthermore, the study gathered empirical evidence via surveys, interviews, and case studies to better understand the firsthand experiences of individuals and communities impacted by legal modifications. The results of this study illuminate various noteworthy societal implications of legal advancements in India. Initially, the text emphasizes the significance of law in advancing social justice and parity. The text examines how legal reforms have effectively tackled societal inequalities, safeguarded marginalized groups, and enhanced the accessibility of justice for the underprivileged. The second objective of this study is to investigate the influence of legal modifications on societal norms, values, and cultural customs. The text examines the impact of legal advancements on societal perspectives on matters such as gender parity, caste-based prejudice, and religious autonomy. This study aims to examine the correlation between legal advancements and societal mobilization. This analysis explores how alterations in legal frameworks have catalyzed social movements, activism, and advocacy endeavours, ultimately resulting in more extensive societal changes. Furthermore, the research delves into the difficulties and conflicts that emerge from the execution and elucidation of novel legislation, encompassing imposition, adherence, and opposition. The findings of this study hold great importance for individuals involved in policymaking, law, and social science. Policymakers can make well-informed decisions that align with societal needs and aspirations by comprehending the social implications of legal advancements. Legal professionals may acquire a more comprehensive understanding of the broader implications of their professional activities, while social scientists may enhance their comprehension of the interplay between law and society. This study adds to the body of knowledge regarding the societal impacts of legal advancements within India. This statement highlights the significant impact that law can have on shaping societal norms, values, and structures, demonstrating its potential for transformation. Through examining the intricate relationship between law and society, this research provides significant perspectives on the multifaceted mechanisms of legal transformation and their ramifications for Indian society. Keyword : India, Law and Society, Legal developments, Social consequences, Social justice, social norms.

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Insolvency Law in Times of COVID-19

Cited by 10 publications

References 0 publications

Regulatory Suspensions in Times of Crisis: The Challenges of Covid - 19 and Thoughts for the Future

Regulatory Suspensions in Times of Crisis: The Challenges of Covid - 19 and Thoughts for the Future

Duty calls: prediction of failure in reorganization processes

Understanding the Social Consequences of Legal Developments in India

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