Rethinking Receivership

John Armour and Sandra Frisby

Working Papers from Centre for Business Research, University of Cambridge

Abstract: A popular perception is that administrative receivers and their appointors hold 'too much' power in relation to troubled companies. Consideration of this issue is timely, because insolvency law is currently under review. We argue although the law's formal structure is imbalanced, this can nevertheless generate savings for parties by allowing a concentrated creditor who has invested in information-gathering about the debtor to conduct a private insolvency procedure. We suggest that this procedure is likely to be more efficient than one conducted by a state official, and that it facilitates debt-based governance, a matter of particular importance for small and medium-sized businesses.

Keywords: Banks; Corporate Insolvency; Debt Governance; Secured Credit (search for similar items in EconPapers)
JEL-codes: G21 G33 G34 K22 (search for similar items in EconPapers)
Date: 2000-03
New Economics Papers: this item is included in nep-ent and nep-law
Note: PRO-2
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Persistent link: https://EconPapers.repec.org/RePEc:cbr:cbrwps:wp159

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