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Pages 20 (5020 words)
The following discussion is going to explore insolvency and the recent changes in the EU to question whether the main aim is to maximize the collective returns to credit, as US Professor Jackson argues. At the moment there have been some interesting changes to Insolvency law in the EU and subsequently in the UK to give more power to the Creditor…
This concept of COMI has been used to allow the more powerful creditor to choose the regime that best suits their needs to maximize their return on credit. The following discussion is going to examine the theory of Professor Jackson and then consider whether he is indeed correct with insolvency law in the UK in domestic cases and then in consideration of cross-border proceedings where the EU regulations apply.
In the US insolvency law seems to more geared towards the creditor regaining their money back, because in good faith they have lent it out. Jackson argues that the assets of the individual should be pooled together and divided amongst the creditors on the strict economic basis to maximize the return of credit to the creditor.1 This would mean that the laws that offer this maximization of credit should be applied, even if there are different jurisdictions because the debt crosses state or international borders.2 Therefore this will be illustrated as the approach taken by the EU in regard to the new trans-border insolvency regulations, rather than individual actions for each creditor in differing jurisdictions. ...
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