S-Space Graduate School of International Studies (국제대학원) Dept. of International Studies (국제학과) 국제지역연구 국제지역연구 vol.08 (1999)
기업회생관점에서 본 EU국가의 파산제도 비교
Saving Distressed Firms and European Bankruptcy Laws
- Issue Date
- 서울대학교 국제지역원
- 국제지역연구, Vol.08 No.3, pp. 83-104
- This paper examines European bankruptcy codes and provides a comparison to US law and between them on the basis of two criteria. The first criterion is the existence of a framework permitting viable but financially distressed firms to reorganize and continue doing business while nonviable firms can be liquidated. The second one is the practical possibility for small and medium sized firms to resort to a formal bankruptcy process. Since the 1980s, many European countries have been reforming their bankruptcy procedures to provide more incentives for saving financially distressed but viable firms. Nevertheless, compared to the Chapter 11, which allows the most flexibility for firms, European bankruptcy laws remain unsuccessful in these efforts. Of the European countries, German law was the least effective in re-organizing firms because of its over-emphasis on the protection of creditors" rights. However, new German law introduces a three-month automatic stay and thereby enhances efficiency in the reorganization process. The UK, despite its reform of bankruptcy laws in 1985, has the most difficult law for saving distressed firms because the individualistic behavior of the secured creditors can lead economically viable firms into premature liquidation. Compared to Germany and the UK, France has gone the furtherest toward providing a framework for resuscitating distressed firms. Moreover, it has a simple bankruptcy procedure for small and medium sized firms. However, by forcing firms to maintain employment and creditor contracts, French law can prevents firms from becoming viable. It can be inferred from this comparative analysis that Korean bankruptcy law allows too much room for large corporations to be saved while forcing small and medium sized firms to be liquidated.