Debt Restructuring by Rodrigo Olivares-Caminal

Debt Restructuring by Rodrigo Olivares-Caminal

ISBN 9780199579693

Publisher : Oxford University Press

PREFACE

Upon reviewing trends in domestic insolvency law regimes around the world, one point is

strikingly clear, that is, many insolvency laws have recently been amended or are currently

under review. One reason is a political reaction to address—for the interests of various parties—

the fi nancial and economic cycles which gave rise to some unforgettable crises (eg the

US sub-prime mortgage crisis and the subsequent ‘credit crunch’ crisis). Th is review of insolvency

laws is also a response to a global impetus focused on avoiding liquidation of troubled

companies as well as to the adoption of UNCITRAL’s cross-border insolvency Model Law.

In times of fi nancial distress, dealing with debt is a complex matter due to the uncertainties

of the outcome and the scarce fl ow of funds. Corporations doing business in this context are

not exempt from the turmoil. As stated by Stone, corporate restructuring on a large scale is

usually made necessary by a systemic fi nancial crisis, that is, a severe disruption of fi nancial

markets that by impairing their ability to function, has large and adverse eff ects on the

economy.1 Financial crises do occur and when they occur they can be of great magnitude.

Th e corporate episodes of Enron, Parmalat, Yukos, and Worldcom were recently shadowed

by the collapse of Lehman Brothers and the bailout and restructuring of several other large

and complex fi nancial institutions. Not to mention the bailouts of Greece and Ireland in the

sovereign arena.