Introduction

Abstract

This introductory chapter provides an overview of the Modular Approach to the insolvency of micro, small, and medium enterprises (MSMEs). The Modular Approach shares with standard insolvency regimes the core objectives of preserving and maximizing value in the insolvency estate, ensuring distribution over an appropriate period of time of the highest feasible proportion of that value to those individuals and entities entitled to it, providing due accountability for any wrongdoing connected with the insolvency, and enabling discharge of over-indebted natural persons. The Modular Approach differs from standard processes, however, in the way it pursues these objectives. Its basic assumption is that the parties to an insolvency case are best placed to select the tools appropriate to that case. The role of the legal regime should be to make these tools available to the parties in a maximally flexible way, while creating the correct incentives for their deployment.