Creditor Status Research Articles

Ultimate beneficial holders of offshore bonds are contingent creditors for winding up proceedings

There has been a recent flurry of decisions from offshore common law jurisdictions dealing with the issue of whether the ultimate beneficial holder in a New York law bond structure has standing as a “ contingent creditor” to present a winding up petition (or the local procedural equivalent) against the Issuer. First-instance courts in Bermuda, the Cayman Islands, and Hong Kong have held that the ultimate beneficial holder is not a contingent creditor for this purpose. The BVI Commercial Court has held that it is. The BVI decision had been appealed by the company, but this has now been withdrawn. In view of the lack of consideration of the issue at the appellate level, this article examines the reasoning of the decisions in detail. It concludes that the approach taken in the BVI is correct. The approach taken in the other jurisdictions is flawed, based on an erroneous conflation between privity of contract and creditor status and relies on unsound case law that has been rejected by more recent authority from the UK Supreme Court.

External wealth of nations and systemic risk

External imbalances played a pivotal role leading to the global financial crisis and were an important cause of turmoil. While current account (flow) imbalances narrowed in the aftermath of the crisis, the net international investment position (NIIP) (stock) imbalances persisted. This study explores the implications of countries’ net foreign positions on systemic risk. Using a sample of 470 banks located in 49 advanced economies, emerging countries, and developing economies over 2000–2020, we find robust empirical evidence that banks can reduce their systemic risk exposure when the countries in which they are incorporated improve their NIIPs and maintain creditor status vis-à-vis the rest of the world. However, only the equity component of the NIIP is responsible for this outcome, whereas debt flows are not significant. Similarly, we find that the mitigating effect of an external balance sheet on systemic risk is derived from valuation gains rather than from the incremental net acquisition of assets or liabilities represented by the current account. Our findings are particularly relevant for policymakers seeking to improve banks’ resilience to adverse shocks and maintain financial stability.

Valid Requirements for Cessie Under Indonesian Civil Law

Cessie is a fundamental concept in Indonesian civil law that governs the transfer of rights to receivables or intangible assets. Understanding this concept is essential for conducting cassie transactions legally and effectively within the Indonesian civil law system. Cessie plays a crucial role in supporting commercial and financial activities in Indonesia by providing a clear legal framework for transferring rights. Several requirements must be met to ensure the validity of cassie under Indonesian civil law. Firstly, there must be a clear receivable as the subject of the proper transfer, including comprehensive details regarding the amount, the debtor, and the payment terms. Secondly, notification to the debtor or written consent from the debtor is a vital requirement that ensures transparency in the change of creditor status. Without such notification or consent, Jessie will not have legal validity. In addition to these requirements, the process of executing an authentic deed or a private document also impacts the validity of the cessie. Using an authentic deed provides a higher level of enforceability and creates more substantial evidence in legal proceedings. Meanwhile, a private document is a simpler alternative that remains valid under Indonesian civil law. Cessie also plays a significant role in extending credit and other financial transactions. It allows parties involved to manage risks and ensure timely debt repayment. Cessie also creates flexibility in managing receivables and intangible assets. Understanding the requirements of cassie and its pivotal role in Indonesian civil law is crucial in maintaining legal validity and certainty in commercial and financial transactions. Cessie is a legal concept and a vital tool for facilitating economic activities in Indonesia.

Doing more with less: The catalytic function of IMF lending and the role of program size

Financial assistance provided by the International Monetary Fund (IMF) is supposed to unlock other financing, acting as a catalyst for private capital flows. The empirical evidence of the presence of such a catalytic effect has, however, been mixed. This paper shows that a possible explanation for the rather inconclusive empirical evidence to date is the neglect of the size of an IMF program. Applying a novel identification strategy to account for endogenous selection into (large) adjustment programs, and using a comprehensive data set spanning the years 1990-2018, we show that the catalytic effect of IMF financial assistance is weakened – and potentially reversed – if the size of a program exceeds a certain level. We argue that large IMF financial assistance coupled with the IMF’s preferred creditor status can lead to a crowding-out of private investors by increasing their loss in the event of default. Our findings add to the debate on the optimal size of Fund-supported programs and can also inform the broader policy discussions on the adequacy of IMF resources.

KEDUDUKAN KREDITOR SEPARATIS DALAM PROSES KEPAILITAN

The purpose of this study is to find out how the position of separatist creditors in the bankruptcy process is. To answer the problem formulation of the author. The research method used is a normative juridical research method, namely legal research conducted by examining library materials or secondary data. By collecting and then reviewing library materials or secondary data relevant to this research. The results of the research that the provisions in the Law on Guarantees and the Law on Bankruptcy and Debt Payment Delays in which the position of separatist creditors takes precedence over other creditors, and is a separation of creditors' rights, is the author's interpretation of the above discussion, so hereby the author draws conclusions based on the results of the above discussion. . Separatist creditors have the same rights to liquidate assets in the bankruptcy process as if the debtor is not declared bankrupt. However, there are no firm and fast rules between Article 55 paragraph (1) of Law 37/2004 concerning Bankruptcy and Debt Payment Delays and the Civil Code rules regarding the rights of creditors who decide, which can lead to disputes between creditors who decide and practitioners of bankruptcy. In particular Articles 56 and 59 of Law 37/2004 concerning Bankruptcy and Debt Payment Delays. To avoid the above scenario, the bankruptcy practitioner must ensure that the status of the separatist creditor as a lien holder is adequately protected in the settlement of his claim. The transfer of substantive rights by the curator is considered null and void by law, so the provision of Article 56 paragraph (3) of Law 37/2004 concerning Bankruptcy and Debt Payment Delay in the interpretation section needs to be changed. After the substantive rights expire, the guaranteed creditor will compete directly with other creditors

Pravni režim zaštite potraživanja zaposlenih u slučaju stečaja poslodavca u Republici Srbiji

When bankruptcy proceedings are initiated by an employer, that often leads to uncertainty and problems for its employees. One of the biggest problems in this kind of situation is the protection of employees' claims arising from the employment relationship. Employees have the right to the payment of their claims arising from the employment relationship, such as unpaid wages, transportation allowances, meal allowances, holiday bonuses and the alike. However, in the case of the employer's bankruptcy, these claims are at risk, and there is a possibility that employees may not be able to fully collect them, which compromises the fundamental principles of labor legislation. For this reason, the state intervenes to protect monetary claims arising from employment. The primary mechanism involves granting privileged creditor status with priority claims, along with mechanisms to protect these claims through a special guarantee institution. If there was no such intervention by the state, the realization of those rights would be difficult. However, even with state intervention, the realization of these rights is not guaranteed. In this regard, this paper will examine models for protecting employees' claims in the event of bankruptcy, while identifying practical problems in this field.

On the Preferred Creditor Status of Multilateral Development Banks

On the Preferred Creditor Status of Multilateral Development Banks

IMF's Surcharges as a Threat to the Right to Development.

This article focuses on the implications of the IMF’s surcharges policies, jointly with its de facto preferred creditor status, on the right to sustainable development of sovereign borrowers. The article argues that, while surcharges are not effective in limiting access to IMF credit, they inequitably distribute the IMF’s operating costs, are disproportionate, pro-cyclical, very costly for developing countries, and non-transparent. Furthermore, if surcharges are theoretically a way to protect the IMF from potential risks of default, the article questions the IMF’s de facto preferred creditor status, as it precisely denies the possibility of granting debt relief in case of insolvency, ultimately affecting the right to development of —mainly— middle-income borrowing countries.

Features of the legal status of the collateral creditor in case of bankruptcy of the debtor

Features of the legal status of the collateral creditor in case of bankruptcy of the debtor

LEGAL REGULATION OF RELATIONS REGARDING THE IMPLEMENTATION OF JOINT ACTIVITIES: THE SEARCH FOR EFFECTIVE INSTRUMENTS FOR THE RECONSTRUCTION OF UKRAINE BASED ON THE EXPERIENCE OF INDIVIDUAL COUNTRIES

The article is devoted to the analysis of foreign experience in the regulation of relations with the implementation of joint activities with the aim of finding effective tools for the post-war reconstruction of Ukraine. The article analyzes the experience of reconstruction of European countries. It has been established that the main sources of the reconstruction of European countries after the Second World War were reparations payments from Germany, as well as economic aid to European countries from the United States. At the same time, it was joint work that became the key aspect that contributed to the relatively quick liquidation of the catastrophic consequences of this war, in particular, the restoration of the identity of settlements, the reconstruction of damaged and the construction of new facilities.It is substantiated that one of the effective tools capable of ensuring the reconstruction of domestic infrastructure can be the construction of an agreement on joint activities, which: 1) gives participants the opportunity to act jointly and in a coordinated manner without creating a legal entity; 2) allows to resolve the issue of the legal regime of property allocated for joint activity and ownership of the results of joint activity; 3) allows attracting investors and their resources to achieve the goal of joint activity. It was noted that in such joint activities for post-war reconstruction, the following aspects are manifested: 1) the peculiarities of the participation of the state of Ukraine and foreign states in civil-law relations; 2) a specific combination of public and private interests; 3) the possibility of attracting significant financial, professional, creative, resources, experience and knowledge, which increases the efficiency, effectiveness of joint activities and the probability of achieving the goal desired by the participants of such activities. This, in turn, determines: a) the specificity of the subject composition, in particular, their lack of a clear definition of the status of creditor and debtor; b) the peculiarity of constructing the content of legal relations, in particular, the absence of corresponding rights and obligations. The article analyzes the experience of establishing the institute of joint activity in such countries as Germany, Poland and Georgia. It was concluded that the conclusion of agreements on joint activity is possible and quite widespread within the legal systems of these countries. At the same time, in contrast to domestic legislation, which provides for the possibility of joint activities between participants and without mandatory contributions (Part 2 of Article 1130 of the Civil Code of Ukraine), the civil law norms of these countries establish the possibility of joint activities exclusively on the basis of the union of contributions, which can be both property and nonproperty rights, which corresponds to the domestic model of a simple partnership agreement (Article 1132 of the Civil Code of Ukraine). At the same time, it is quite obvious that joint activity in the field of post-war reconstruction of damaged or destroyed infrastructure facilities in Ukraine is virtually impossible without contributions in the form of funds, knowledge and experience, given that the most appropriate contractual structure for the reconstruction of Ukraine through joint the efforts of several persons is a simple partnership agreement.

Contesting the preferred creditor status of the League of Nations, 1931–3†

AbstractThis article analyses the defaults of the League loans, which were private loans promoted by the League of Nations to support governments in central and eastern Europe in the 1920s. Previous works have argued that governments refused to grant these loans preferred status. However, this article shows that at the onset of the crisis, investors and governments treated these loans differently. It provides an empirical analysis to test whether there was a common element in the pricing of these loans and whether they enjoyed seniority compared to other, non‐League loans. The findings show that there was a common factor driving the bond prices of these loans at the onset of the 1931 banking crisis. This article demonstrates that while these loans were not legally senior, certain governments granted the League loans de facto preferred status under the assumption that averting default would foster renewed support from the League. Archival evidence is provided to show that governments ceased to grant the League loans exceptional treatment when the expected support from the League did not materialize, which further weakened the ability of the League to secure emergency lending.

Position of Tax Debt and Labour Right: Legal Review

This study aims to explain the position of tax debt and labour right in bankruptcy. The legal research method used in this research using normative research, the legal rules and legal principles used related to bankruptcy law, tax law and labour law will be a reference in describing the problem of the position of tax debt and labour right in bankruptcy cases. The Taxation Law gives a special treatment and higher position on which the tax debt is first to be paid by the debtor and followed by the right borne by the separatist creditor. On the other hand, Law Number 13 of 2003 concerning Employment also regulates that the labour of the wages and other rights of the labour and positioned the labour as preferred creditor on which the privilege is given by the law. However, there are no statements in the Employment Law that stated the position of labour as a preferred creditor is higher than separatist creditor in the matter of bankrupt as what the Taxation Kaw expressed creditor is higher than the separatist creditor within the matter of tax payment. That distinction seems positioned the preferred creditor status of labour is lower than the position of separatist creditor on the matter of right fulfillment in bankruptcy. It is certainty that the statement which stated that the collection of tax debts have the right to preceded than other debts does not fit in this matter. Eventually, there is a decision of Constitutional Court Number 67/PUU-XI/2013 that provides a change within the position labour’s right on the matter of bankruptcy.

Cryptocurrency Meets Bankruptcy Law: A Call for Creditor Status for Investors in Initial Coin Offerings

In 1973, experts Homer Kripke and John Slain published a seminal study titled “The Interface Between Securities Regulation and Bankruptcy.” That lengthy analysis, contributed by, respectively, a former Securities and Exchange Commission official and a professor of law, examined the status quo and concluded that investors were receiving unfair priority vis-a-vis creditors in bankruptcy proceedings administered under the federal Bankruptcy Code. Focusing on the traditional “absolute priority rule,” the study pointed out that the Securities and Exchange Commission (SEC) support for the investor priority was unfounded and urged deference to the notion of general creditors coming first. Since then, a host of developments has complicated both the analysis and the traditional view of Kripke and Slain. First, the pivotal determination of “rescinding shareholder” has been made complex by, inter alia, an expanded notion of “sophisticated investor” occasioned by phenomena such as “crowdfunding.” Second, stock swaps, hedges, repurchase agreements and other hybrid responses to financier discomfort have clouded the definition of “investor.” Finally, the explosive growth of cryptocurrencies (and the ventures that would sell, distribute, trade or package them) has highlighted the need for a new, softer line between creditor and investor. Accordingly, the present authors re-visit the “absolute priority rule” with a view towards historic SEC involvement with Bankruptcy law and contemporary classification of some cryptocurrency-related entities as securities issuers. The article concludes that in light of the existing provisions and interpretations, the “absolute priority rule” examined through the lens of today’s innovative securities should be rethought to give investors in initial coin offerings creditor status. Whether the reader agrees or not is likely subordinated to the need for a conversation on the most egalitarian response – under both the securities laws and the Bankruptcy Code – to the investor’s claim for in pari passu treatment normally reserved for creditors, and likewise the general creditors’ opposition to sharing a legally enforceable priority.

Net external position, financial development, and banking crisis

Does the external position of a country that is conditioned on financial development impact the likelihood of a systemic banking crisis? We address this question using data from 149 developing and advanced countries from 1970 to 2011, as well as a variety of statistical tools. Our findings are twofold. First, we find that the net external position of a country significantly affects its likelihood of a systemic crisis depending on the level of financial development. Conditional on low to moderate financial development, countries can lower the risk of banking crises significantly by maintaining a net foreign creditor status. Second, we find that the level of financial development raises a countryi?½s crisis risk significantly while its impact depends on the net asset position. This indicates a potential amplification effect in which countries with more developed and complex financial systems that are also debtor countries have a higher potential of incurring a systemic banking crisis.

Doing More with Less: The Catalytic Function of IMF Lending and the Role of Program Size

Financial assistance provided by the International Monetary Fund (IMF) is supposed to unlock other financing, acting as a catalyst for private capital flows. The empirical evidence of the presence of such a catalytic effect has, however, been mixed. This paper shows that a possible explanation for the rather inconclusive empirical evidence to date is the neglect of the size of an IMF program. Applying a novel identification strategy to account for endogenous selection into (large) adjustment programs, and using a comprehensive data set spanning the years 1990-2018, we show that the catalytic effect of IMF financial assistance is weakened - and potentially reversed - if the size of a program exceeds a certain level. We argue that large IMF financial assistance coupled with the IMF's preferred creditor status can lead to a crowding-out of private investors by increasing their loss in the event of default. Our findings add to the debate on the optimal size of Fund-supported programs and can also inform the broader policy discussions on the adequacy of IMF resources.

THE PROBLEM OF NAVAL WEAPONS’ LIMITATION IN FOREIGN POLICY OF THE USA IN THE EARLY 20-IES OF XX CENTURY

The article researches the position of the United States on the issue of naval arms restriction in the early 20-ies of the XX century. There are outlined causes, the course and the consequences of the intensification of Washington’s naval activity during the investigated period. It is explored the process of formation and implementation of the US initiatives to limit naval weapons before and during the Washington Peace Conference of 1921–1922. The role of the USA in the settlement of foreign policy contradictions between the leading countries of the world in the early 20-ies of the XX century is analyzed. In the early 20’s of the XX century there have been some changes in the international relations system and the role of the USA in it. Despite the isolation stance taken by Washington, the White House continues its policy of «open doors» and «equal opportunities», promoting the elimination of unequal agreements between foreign countries with China, and attempts to influence the position of European countries and Japan in the naval contest issues and limitation of naval weapons. Taking full advantages, which were giving the United States’ the richest country and world creditor status, the US Department of State has stepped up its US impact in the Asia-Pacific region. The new Republican administration succeeded in offsetting the failures of the Paris Decisions of 1919–1920 and began to СУМСЬКА СТАРОВИНА 2019 №LIV 75 construct a new model of international relations in which the United States would occupy a leading position. The success of US diplomacy at the Washington Peace Conference of 1921– 1922 contributed to this. However, the conflict between the former allies within the Entente was only smoothed out and not settled. The latter has led to increasing US capital expansion into Europe due to the significant economic growth in the country. Despite the fact that the Republicans’ achievements in US foreign policy on local issues have been much more specific than trying to solve the problem of a new system of international relations globally, these achievements have been rather relative. Leading countries in the world were still making concessions to the White House on separate issues, but in principle they were not ready to accept the scheme of relations offered by the States. That is why American foreign policy achievements have been impermanent. Key words: the

Функциональные изменения участия Китая в многосторонних банках развития: от заемщика к кредитору

Multilateral development banks (MDBs) play an important role in world economic processes and global economic governance. Since the establishment of the first multilateral development bank - the International Bank for Reconstruction and Development (IBRD) - MDBs have emerged in three waves, each time as a response to the major changes in the world arena. The creation of the New Development Bank (NDB) and the Asian Infrastructure Investment Bank (AIIB)represents the third and latest wave of MDBs. These new development banks have arisen as a consequence of an historic shift in global economic power from developed countries to emerging economies and more specifically of an increase in China’s economic might. This article traces the evolution of China’s participation in MDBs, characterizes various forms of China’s engagement with MDBs at specific periods of history, and explains Beijing’s motivation in establishing new MDBs. During almost 40 years of interaction with the multilateral development banks, China has made a great leap forward from large borrower to creditor status, from ordinary member to the initiator and creator of new MDBs under its auspices. This article identifies the scale, composition and dynamic of MDBs’ assistance to China. It points out that despite its eye-catching economic achievements, China remains one of the largest borrowers from MDBs. Yet, in the process of China’s participation in MDBs there have been two turning points: in 2004-2005 when China turned to become a creditor, and during the 2008 global financial crisis when China set a course for promoting the reform of global governance system and creation of new China-dominated financial bodies. The creation of new financial institutions is evaluated in the article as indicating Beijing’s foreign policy ambitions to assume a leadership role in the global economic architecture, while the fact that China is acting both as a creditor and a borrower in MDBs reflects the incomplete nature of China’s modernization efforts and its elevation to the status of a great power with global outreach. Overall, the establishment of new multilateral development banks is evaluated in the article as effective in promoting Beijing’s efforts to solidify its position in the world economy and the international system.

Pelaksanaan Eksekusi Hak Tanggungan yang Tidak Didaftarkan Di Kantor Badan Pertanahan

The purpose of this study was to determine and analyze the fund execution of mortgages rights and legal effects arising from the execution of mortgages that are not registered to the office of land agency.The research method that used in this study was Normative legal research and Empirical law research, with the legislation approach, conceptual, and sociological. Data analysis and legal materials was done by analyzing the various regulations that specifically regulate the rights of dependents as well as analyzing the findings data on the fields that related to practice of unregistered mortgages.Based on the results of the research, the creditor can still execute mortgages that are not registered in the office of land agency, by means that there is a guarantee from Notary in the form of Covernote. The creditor refers to the Power of Attorney for Load Rights (SKMHT) which has been made with the Deed of Assignment Rights (APHT) in the presence of a Notary or PPAT, and asks PPAT to register the Mortgage Right at the Office of Land Agency, with time limit of 3 (three) month maximum.The legal consequences of the execution of an unregistered mortgage cause the creditor of the mortgage does not have the position of the preferred creditor, but the same as the position of the concurrent creditor. From the decline of the creditor's status, because it does not meet the fundamental and conditions that require mortgage rights are registered. As well as mortgage rights can coused invalidated by law.

Towards a More Efficient Use of Multilateral Development Bankss Capital

The increasing financing needs of the Sustainable Development Goals (SDGs), coupled with factors likely to restrain in the near future the growth of multilateral development banks’ (MDBs) own resources, call for maximizing capital efficiency. Focusing on 7 major MDBs – the IBRD, IFC, AfDB, EBRD, EIB, ADB and IADB – this paper contributes to this debate by: (a) quantifying their aggregate available lending capacity (capital resources and ratings being unchanged); (b) providing a preliminary estimate of the impact on these banks’ lending capacity if rating agencies (in particular, Standard and Poor’s) were to refine their methodologies to take into account ‘preferred creditor status’ and ‘single name concentration’, as suggested by other researchers. The analysis is replicated assuming that MDBs target an AA rating. The paper shows that appropriately refining rating procedures may indeed increase MDBs’ current overall lending capacity significantly, under both ‘triple-A’ and ‘AA ’ scenarios. At the same time, it makes clear that MDBs alone cannot satisfy what are anticipated to be the very substantial financing needs of SDG-related investments.

Bankruptcy in Slovakia: international comparison of the creditor´s position

Research background: Bankruptcy shouldn´t be considered only as negative phenomena although its impact is for companies in most cases more than devastating. This change of point of view is invoked by the needs of contemporary socio-economic evolution. If society wants to reach sustainable development, the bankruptcy should be perceived as an immanent part of normal cyclical economic development. Moreover, if the view of bankruptcy is changed in a positive way, it can be a stimulus for innovations, investment and global welfare. But it is not possible without an increase in the effectiveness of national and international bankruptcy law.Purpose of the article: The goal of this study is to analyse the position of a creditor in the case of a debtor´s bankruptcy on the basis of comparative law in the Slovak Republic de lege ferenda. It is because we assume that continuous attention should be given to the issue of the creditor?s position with regard to a debtor´s bankruptcy to achieve sustainable economic development.Methods: The potential consideration de lege ferenda should be based not only on performed legal analysis, but also on performed economic analysis. So, selected countries have been evaluated according to specific economic and legal indicators. We used the interdisciplinary approach based on selection analysis and legal comparative analysis applied to international comparison of the status of creditor and the effectiveness of bankruptcy law from his point of view.Findings & Value added: The applied approach has led us to the detection of the most important insolvency laws, specifically the insolvency laws of the United States and Austria. These legislations were further applied in the context of consideration de lege ferenda over the position of a creditor in the case of a debtor´s bankruptcy in the Slovak Republic.