The changes in corporate insolvency law in 1985, later consolidated in the Insolvency Act (IA) 1986, were inspired by developments in the late 1970s in the USA and the insolvency administration known as ‘Chapter 11 bankruptcy’. Under Chapter 11, businesses which had run into financial problems were able to place themselves under the protection of the bankruptcy laws in an attempt to hold their creditors at bay while they attempted to solve their financial problems. The procedure enabled the directors to remain in control of the company while the rescue plan was worked through. The success of the procedure was a source of inspiration for the Cork Committee, whose report was the basis of the reform of insolvency law, and UK corporate insolvency law was reoriented towards saving sick businesses — giving rise to a culture of corporate rescue. The same inspiration was behind the reform of corporate insolvency law elsewhere in the world including Australia and France.
Swipe to navigate through the chapters of this book
Please log in to get access to this content
- Registered companies: corporate insolvency
- Macmillan Education UK
- Sequence number
- Chapter number
- Chapter 13