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Corporate Insolvency Laws in Selected Jurisdictions: US, England, France, and Germany—A Comparative Perspective

by Ana Maria Fagetan

Laws 2025, 14(2), 21; https://doi.org/10.3390/laws14020021 - 28 Mar 2025

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This article examines key aspects of corporate insolvency law. The main research jurisdictions are the US, England, France, and Germany. This study adopts a functional approach that compares different legal regimes of corporate insolvency law in light of the legislative changes related to the EU directive (EU) 2019/1023. This directive, to some extent, triggered a paradigm shift, leading to varying degrees of reform across all EU member states and even influencing non-EU jurisdictions. This article is structured into four parts. The introduction provides an overview of corporate insolvency laws. The second part focuses on directive (EU) 2019/1023 on preventive restructuring frameworks, which considers the requirements regarding the classes of creditors and the related procedures. The third section examines the differences and similarities in the conceptual framework of the corporate insolvency law in the selected jurisdictions, with particular emphasis on their approach—whether creditor-friendly or debtor-friendly—and their bankruptcy procedures. Finally, the last section highlights jurisdictional divergences. This article contributes to the understanding of corporate insolvency law as a complex international issue by comparing national approaches and offering legal recommendations. Full article

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13 pages, 268 KB

Open AccessArticle

Determinants of Zombie Firms: The Impact of Corporate Insolvency Efficiency and Cultural Factors

by Yongcuo Zhaxi and Yukihiro Yasuda

J. Risk Financial Manag. 2024, 17(8), 317; https://doi.org/10.3390/jrfm17080317 - 24 Jul 2024

Cited by 1 | Viewed by 3122

Abstract

By examining a broad range of companies from both developed and developing nations from 2015 to 2021, we gather evidence on the occurrence and factors contributing to the existence of zombie firms. Approximately 10% of our observations are identified as zombie firms, and there is significant variability in the proportion of zombie firms across different countries. We find that countries with more efficient corporate insolvency rules tend to have a lower incidence of zombie firms. We also establish that a nation’s culture plays a vital role in determining the prevalence of zombie firms. More specifically, our findings indicate that countries with higher levels of individualism culture tend to have lower numbers of zombie firms. Full article

(This article belongs to the Special Issue Financial Markets and Institutions)

13 pages, 868 KB

Open AccessArticle

How Efficient Are Indian Banks in Managing the Risk-Return Trade-Off? An Empirical Analysis

by Jalaludeen Navas, Periyasamy Dhanavanthan and Daniel Lazar

Risks 2020, 8(4), 135; https://doi.org/10.3390/risks8040135 - 8 Dec 2020

Cited by 1 | Viewed by 4760

Abstract

Risk taking is an inherent element of the banking business. Banks make conscious decisions regarding risk taking as they expect to make more return if they take more risk. The primary objective of this study is to empirically investigate the efficiency of Indian banks in generating return relative to the risk they take. If the efficiency measurement is not adjusted for different risk preferences, then a bank earning lower return at lower risk may be misclassified as less efficient compared to peers earning the same level of return, but operating at a higher level of risk. This paper uses measures of liquidity risk, credit risk, market risk, and insolvency risk to develop a risk-return stochastic frontier in order to examine the risk efficiency of banks, a novel attempt in the Indian context. The paper further analyzes the efficiency of banks with respect to bank specific characteristics and risk management regimes. The models are estimated using data from a sample of 47 major banks for the period 2009–2018. The study reveals that Indian banks, on average, exhibited lower efficiency in trading risk against return during the sample period. Full article

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