Abstract

MIGUENS, HÉCTOR JOSÉ. Prior Out-of-Court Insolvency Proceedings under the Prepackaged Chapter Eleven of the United States Bankruptcy Code. Díkaion [online]. 2018, vol.27, n.2, pp.231-281. ISSN 0120-8942.  https://doi.org/10.5294/dika.2018.27.2.3.

The study examines the Prepackaged Chapter Eleven (hereinafter referred to as the PCE), which is an out-of-court, alternative bankruptcy procedure where a restructuring plan is agreed in advance of a company declaring its insolvency. These so-called "pre-packaged" bankruptcy plans can be used in a Chapter Eleven filing under the US Bankruptcy Code. They are part of the bankruptcy system in the United States that covers preventive solutions to insolvency in that country, the purpose of which is to preserve and virtually save a company from disappearance, both economically and as a legal entity. It is known by the name of its respective chapter; namely, Chapter Eleven of Title Eleven of the United States Bankruptcy Code, a federal norm on insolvency that covers a range of subjects in its different chapters. The following topics are addressed in the study: the PCE in the context of United States law on bankruptcy; the variables that justify choosing between the PCE and the traditional bankruptcy process provided for in Chapter Eleven; the other extrajudicial or out-of-court ways to reorganize a business; a description of the PCE and the scope of its application; its historical background; the legislative policy in the Bankruptcy Reform Act of 1978; the possibilities and advantages of the procedures prior to a Chapter Eleven filing; a comparison between the out-of-court process of the PCE and the judicial process outlined in Chapter Eleven; cases in which the PCE is not convenient or pertinent; types or variations of the PCE; techniques for a successful PCE; the procedural requirements for soliciting a pre-insolvency vote; the risks in a PCE; some recent developments; the effects of the 2005 bankruptcy reform, and the effectiveness of the PCE. The conclusions contain a critical assessment of these subjects.

Keywords : Bankruptcy Law; United States; Reorganization procedure; Chapter Eleven - Prepackaged Chapter Eleven.

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