Ms Sarah Paterson

This course is available on the LLB in Laws. This course is not available as an outside option nor to General Course students.

English corporate insolvency law has undergone two periods of significant reform.  The first, in 1986, provided the framework for modern corporate insolvency law.  The second, in 2002, had perhaps slightly greater ambition for reform of law in action than was ultimately realised.  There is now another period of wide spread reflection and debate, not only in the UK but also in Europe and the US, as jurisdictions consider whether the insolvency law and procedures which they have are fit for the twenty-first century.

In Michaelmas Term we analyse the key insolvency procedures available in English law, with a view to determining the extent to which they meet their aims and objectives and evaluating the case for reform.  In Lent Term, we analyse the legal rules affecting distressed and insolvent companies and those concerned with them (for example, creditors, directors and employees) and the issues and principles underlying a corporate insolvency regime.  This will lead us to consider how different goals are balanced in the corporate insolvency legislation, for example: ensuring that vulnerable stakeholders are protected while encouraging the rescue of financially distressed companies; giving companies a chance to recover while ensuring that companies cease to trade when failure is inevitable and losses must be stopped; and saving jobs while encouraging the purchase of financially distressed businesses. 

(Corporate Insolvency Law bears a close relationship to the Law of Business Associations (BA) and students may find that taking BA as well as Corporate Insolvency will give them a broad understanding of major themes relating to corporate activity.)

Syllabus:

Corporate Borrowing

• Outline of corporate borrowing and development and nature of security interests: fixed and floating charges; security by the use of ownership rights.
• Types of creditor.

Insolvency Procedures

• Out-of-court workouts
• Receivership
• Administration and pre-packaged administration
• Company Voluntary Arrangements
• Liquidation
• Comparison with Chapter 11 of the US Bankruptcy Code
• Corporate insolvency law theory

Realising and distributing the assets

• Setting aside transactions
• The pari passu principle
• Security devices for consumer creditors and commercial suppliers
• Liability of company directors
• Employees
• The regulation of insolvency practitioners

This course is delivered through a combination of classes and lectures totalling a minimum of 40 hours across Michaelmas Term and Lent Term. This year some or all of this teaching will be delivered through recorded online lectures and a mix of both in-person and online classes to accommodate students who are unable to physically be on campus.  This course includes a reading week in Weeks 6 of Michaelmas Term and Lent Term.

Students will be expected to produce 1 essay in the MT & 1 essay in the LT. The formative essay in the LT may take the form of a mock examination.

Detailed reading lists will be provided during the course. The recommended book is V. Finch and D. Milman, Corporate Insolvency Law: Perspectives and Principles ( 3rd ed., 202017) (Cambridge University Press).

Exam (100%, duration: 3 hours, reading time: 15 minutes) in the summer exam period.

The examination will be based on the full syllabus. Unmarked, unannotated versions of the relevant legislation may be taken into the examination.