Creditor Rights and the Public Interest: Restructuring Insolvent Corporations

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University of Toronto Press, 2003 - Business & Economics - 340 pages
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Creditor Rights and the Public Interest supports the greater representation of non-traditional creditors in the process of insolvency restructuring in Canada, concentrating particularly on restructuring under the federal Companies' Creditors' Arrangement Act (CCAA). Arguing in favour of the representation of such non-traditional creditors as workers, consumers, trade suppliers, and local governments, Janis Sarra describes the existing process of addressing their interests, analyzes four case studies that focus on non-creditor groups, and compares the Canadian approach to that of several other countries, such as Germany, France, and the United States.

Sarra draws on a comprehensive body of academic literature that covers a broad range of issues--insolvency theory, corporate governance theory, legislative history, and bankruptcy and insolvency practice. She further surveys the relevant legislation and supplements her analysis with insights drawn from extensive primary research of court records and personal interviews with lawyers, judges, and government officials.

Creditor Rights and the Public Interest ultimately illustrates the way in which the concept of the public interest can be utilized to foreground the concerns of non-traditional stakeholders. Sarra provides a coherent account of the justification for recognizing these creditors by situating insolvency law in a legal regime that realizes a duty to maximize all of the interests and investments at stake in the corporation. In an academic field where scholarship is currently scarce, Sarra's text will be a welcome contribution.

 

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Contents

The Existing Regime for Restructuring Insolvent
10
Current Theoretical Approaches to Insolvency Law
30
Proposing a Conceptual Framework for Reconciling Stakeholder
56
Public Policy Recognition of the Value of Workout Schemes
66
An Expanded Definition of Stakeholders
89
Enterprise Value Maximization as a Substantive Objective
100
Principles for Reconciling Traditional Creditors Rights with
106
Judicial Discretion under the CCAA
113
Judicial Recognition of Social Stakeholders in CCAA
181
Canadian Red Cross
195
Canadian Airlines Corporation and the Public Interest
217
Creditor Rights and the Public
229
Enterprise Wealth Maximization as an Objective of Insolvency
240
Reconciling the Rights of Traditional Creditors and Other
251
Conclusion
267
Notes
297

Recognition of Human Capital
157
Recognition of Community as Stakeholder in the 19912 CCAA
163
Governance under the 2001 Plan of Arrangement
169

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About the author (2003)

Janis Sarra is an Assistant Professor in the Faculty of Law at the University of British Columbia. She teaches courses in corporate law, insolvency law, and contracts.

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