Court-Supervised Restructuring of Large Distressed Companies in Asia: Law and Policy

Description

This book provides an in-depth analysis of four economically significant Asian jurisdictions: Mainland China, India, Hong Kong and Singapore. These jurisdictions have recently either reformed – or are considering reforming – their corporate restructuring laws to promote regimes conducive to restructuring financially distressed, but otherwise economically viable, companies. Mainland China, India, Hong Kong and Singapore continue to adhere to a framework that requires the court’s final approval but draw references from Chapter 11 of the Bankruptcy Code 1978 in the United States and/or the schemes of arrangement in the United Kingdom. However, the institutional and market structures are very different in Asia; in particular, Asia has a far higher concentration in shareholdings among listed firms, including holdings by families and the state, and a different composition of creditors. The book explains how, notwithstanding the legal transplantation, corporate restructuring laws in these Asian jurisdictions have adapted and evolved due to the frictions in shareholder-creditor and creditor-creditor relationships, and the role of the state in resolving non-performing loans and financial distress of state-owned enterprises which are listed, or which issue public debt. The study argues that any reforms must go beyond professionalising the insolvency professionals and the judiciary but must be designed to address fundamental issues of corporate governance, bank regulation and enforcing non-bankruptcy rules. It offers invaluable insights for academics and policy makers alike. Preface Acknowledgements Table of Contents List of Abbreviations References to Judicial and Policy Guiding Documents in Mainland China (Bilingual) List of Tables List of Figures Table of Cases Table of Legislation and Other Materials 1. Introduction and Theoretical Framework 1.1. Overview 1.2. Restructuring Models in Anglo-America and Asia 1.3. Understanding the Interaction between Corporate Governance and Restructuring Law 1.4. Building an Analytical Framework 1.5. Methodology 1.6. Organisation of the Book 2. Development of Corporate Restructuring Law in Four Asian Jurisdictions 2.1. Introduction 2.2. Emerging Jurisdictions 2.3. Advanced Jurisdictions 2.4. Conclusion 3. The Agency Costs of Manager-Creditor and Shareholder-Creditor Relationships in Restructuring 3.1. Introduction 3.2. Institutional and Organisational Background 3.3. Strategies to Deal with Agency Costs of Manager-Creditor and Shareholder-Creditor Conflicts in Anglo-American Restructurings 3.4. Addressing Information Asymmetry and Hold-Out Problems in Asian Restructurings 3.5. Enhancing the Restructuring Regime: Lessons and Implications 3.6. Conclusion 4. The Agency and Coordination Costs of Creditor-Creditor Relationships in Restructuring 4.1. Introduction 4.2. Institutional and Organisational Background 4.3. Strategies to Deal with Agency and Coordination Costs of Creditor-Creditor Conflicts in Anglo-American Restructurings 4.4. The Features of Asian Restructurings 4.5. Enhancing the Restructuring Regime in Asia: Lessons and Implications 4.6. Conclusion 5. Managing Non-Performing Loans and their Impact on Agency and Coordination Costs in Two Emerging Jurisdictions 5.1. Introduction 5.2. Institutional and Organisational Background in the International Context for Resolving NPLs 5.3. Institutional Background to NPLs in India and Mainland China 5.4. AMCs and Variations to Agency and Coordination costs in Restructuring 5.5. Developing Active Distressed Loan Markets in India and Mainland China 5.6. Conclusion, Lessons and Implications for Managing NPLs 5.7. Postscript 6. Insolvency Practitioners as Gatekeeper Intermediaries 6.1. Introduction 6.2. Role of Insolvency Practitioners: A Comparative Perspective 6.3. The Governance of Intermediaries: Accountability, Conflicts of Interest and Effectiveness 6.4. Lessons, Implications and Options for Reform in Asian Jurisdictions 6.5. Conclusion 7. Role of the Courts in Court-Supervised Restructurings 7.1. Introduction 7.2. Legislative Framework and Judicial Discretion in the US and the UK: Strengths and Limitations 7.3. Legislative Framework and Judicial Discretion in Asia 7.4. Lessons and Implications 7.5. The Experience of Mainland China 7.6. Conclusion 8. Relationship between Restructuring Law, Enforcing Contracts and Directors" Duties 8.1. Introduction 8.2. Impact of Enforcing Creditor Rights on Restructuring Law 8.3. Analysis 8.4. Directors' Duties and Incentives to Invoke or Use Restructuring Law 8.5. Conclusion 9. Restructuring Law, Implications for Reform and Conclusion 9.1. Introduction 9.2. Seven Propositions in this Book 9.3. Future Prospects for Reform in the Asian Jurisdictions 9.4. Conclusion Appendices Bibliography Index