Insolvency Reform in Asia. The Role of the Judiciary Manfred Balz Deutsche Telekom AG Bali, Indonesia, 7 February 2000. Overview. Links with Bankruptcy Philosophy and Institutions The German Model Judicial Involvement: Selected Issues Jurisdiction for Bankruptcy Related Litigation
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Insolvency Reform in Asia
The Role of the Judiciary
Manfred BalzDeutsche Telekom AG
Bali, Indonesia, 7 February 2000
Insolvency (insufficiency of assets to cover debt) makes bankruptcy a
common pool problem. Creation of a pool of assets (estate) and the stay
on individual creditor action require collective action. Legislative options
and bankruptcy philosophies are:
High complexity and diversity of claimant interests:
influence claimants’ preference for speed and for rehabilitation v.
liquidation. Rescue means re-investing one’s potential liquidation cash
dividend in a new venture. Therefore, decisions on bankruptcy
adjudication, case administration, continuation or break-up, and rescue
are essentially adversary issues of an economic nature.
A unitary proceeding with unitary rules within which a break-up
liquidation, a sale of the going concern, and a rescue plan may be
pursued by creditors. The judge supervises the legality of proceedings
and moderates trustee and creditor action.
No court involvement in essentially economic issues, such as:
A minimum of judicial involvement in economic issues is achieved by:
Adjudication should be speedy without burdening the judge with complex
Effective and fair reorganization type rescues in bankruptcy require
considerable judicial involvement in economic issues for plan
Judges may be exposed to conflicting expert valuations and have to make
far-reaching policy choices of an economic nature.
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