Corporate Restructuring Laws Under Stress: Policy-Making in Uncertain Times

Abstract

The economic crisis triggered by the coronavirus pandemic is the most significant global crisis of its kind outside of wartime and the full impacts are still largely unknown. The path to economic recovery is impaired by the war on Ukraine. Many countries have either entered or are about to enter an economic recession. Now that many government support measures have expired or have been exhausted, it is unlikely that they will return at the same level. Many businesses are facing both a liquidity and a solvency crisis. This article considers the impact of these times of crisis and uncertainty on insolvency law-making across over 30 economies where the European Bank for Reconstruction and Development invests. It reflects on arguments raised by Menezes and Lawless in this volume and argues that national legislators should look to insolvency reforms (including in relation to digitalisation) to help their economies recover from recession and the economic shocks of the pandemic and the war on Ukraine, and work to improve the availability of insolvency data. Many international commentators have analysed the global crisis insolvency response from a developed economy perspective. This article focuses on the position in emerging economies, finding that, for a variety of reasons, insolvency was not at the forefront of the national emergency response for many emerging economies during the pandemic. It highlights some of the main deficiencies in insolvency frameworks and makes some suggestions for future policy-making for countries that want to strengthen the overall resilience of their insolvency systems, and financial restructuring processes in particular, to navigate future crises.