The going-concern surplus can be obtained if the business and assets are preserved as an operating unit, surviving either through a successful company turnaround or reorganisation, or through a going-concern sale, where the whole or substantial business and assets of the ailing company are preserved. Bailout Takeover: A scenario in which a government or profitable company acquires control of a financially unstable company with the goal of … iv 62 See Blair and Stout, ‘A Team Production Theory of Corporate Law’, footnote 136 at p 302. The only formal corporate rescue process currently available in Malaysia is the scheme of arrangement under section 176 of the Companies Act 1965. This happens where a company is insolvent but successful steps are taken to retain the business as an operational enterprise, to sustain the employment of groups of workers and to ensure the survival of some economic activity.3 Company rescue often involves changes in the management of the company and is usually achieved through reorganising methods such as refinancing, debt composition or rescheduling, downsizing activities, and making redundant part of the workforce to offer temporary relief.4 Business rescue is commonly achieved through the sale of the company’s assets and business as a going concern, which, as commonly believed, could generate more value than assets being sold in a piecemeal fashion. The letters SOS have been used as a code for emergency since 1905. The ‘pre-pack’ process is commonly seen as a hybrid form of corporate rescue combining the advantages of private restructuring with some of the properties of the formal procedure. 105 The traditional domination of bank debt in financing large UK debtors is identified as one of the fundamental backgrounds of the prevalence of the London Approach. 127 JL Westbrook, ‘The Control of Wealth in Bankruptcy’ (2004) 82 Texas Law Review 795, 805. The administrator is required to first consider rescuing the company as a going concern, unless in the administrator’s view, that is not reasonably practical and/or it is not in the interests of creditors as a whole. 13 McCormack, Corporate Rescue Law: An Anglo-American Perspective, 4–5. Section 4 reviews theories underpinning the goals of insolvency law and corporate rescue, examining how the various and competing goals that underlie the insolvency system could be effectively served. 25 Baird and Jackson, ‘Corporate Reorganizations and the Treatment of Diverse Ownership Interests: A Comment on Adequate Protection of Secured Creditors in Bankruptcy’, 100. In particular, how should the competing interests and various goals that underlie the insolvency system (e.g. In order to provide adequate protection for various groups of creditors, as well as checks and balances on the conflicting incentives among different stakeholders, the legal proceedings often involve complicated documentary accountability requirements and rounds of negotiations to conclude the approval of the rescue plan. The UK government had previously said that the … Features. Importance of Funding In Corporate Rescues For a lot of companies going through corporate rescue, the provision of additional funding But what exactly, is the SOS meaning? A general advantage of private workouts is that they provide the debtor company and its creditors with a more flexible environment in which to negotiate the resolution of a company’s financial difficulties than under insolvency procedures. 40 McCormack, Corporate Rescue Law: An Anglo-American Perspective, 28. See J Franks and W Torous, ‘Lessons from a Comparison of US and UK Insolvency Codes’ (1992) 8 Oxford Review of Economic Policy 70, 75. Share photos and videos, send messages and get updates. The practitioner’s duty is to reduce the debt owed by the company and return it to stable operations. Bankruptcy proceedings should not be the place to implement a policy that society does not enforce outside of bankruptcy and that is unrelated to the preservation of assets for the firm’s investor group.27 It follows from the above arguments under this theory that the protection of the non-creditor interests of other victims of corporate misfortune, such as employees, managers, suppliers and the community at large ought not to be a concern of insolvency law.28, The creditor wealth maximisation argument has been highly influential and has been put into legislative effect in many jurisdictions.29 However, this normative theory has been subject to extensive criticism by a number of schools of thought. The aims of a business the differences in their institutional arrangements governing Insolvency and the voting rules under a rescue! 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