COMPANY INSOLVENCY LAW

The course aims to provide students with a comprehensive understanding of company insolvency law, with particular attention to the evolution of the European insolvency culture from a liquidation-oriented approach to a rescue-oriented and restructuring-based model. The course will analyse the legal, financial and governance tools available to manage corporate distress, preserve business continuity where feasible, protect creditors, and ensure an efficient allocation of value in insolvency and restructuring proceedings. Specific focus will be placed on corporate rescue, restructuring mechanisms, liquidation procedures, creditor claims, directors’ duties and liabilities, and cross-border insolvency. The course adopts a problem-solving approach and encourages students to apply legal principles to practical cases involving financially distressed companies, negotiations with creditors, restructuring plans and insolvency scenarios. Students will be expected to develop analytical and reasoning skills, as well as the ability to assess how and why different insolvency and restructuring tools may be used in concrete business situations.

At the end of the course, students will have acquired knowledge of the main principles and tools of company insolvency law, including insolvency tests, rescue and restructuring procedures, liquidation mechanisms, creditor priorities, directors’ duties in the vicinity of insolvency, and cross-border insolvency issues. Students will be able to apply legal concepts and insolvency principles to practical cases concerning financially distressed companies. They will be able to identify the appropriate legal tools for corporate rescue, restructuring or liquidation, and to assess their consequences for debtors, creditors, shareholders and directors. Students will be expected to critically analyse corporate distress situations and evaluate the legal and economic implications of different insolvency and restructuring strategies. They will also develop the ability to discuss insolvency and restructuring issues using appropriate legal terminology in English.

Basic knowledge of commercial law, company law and private law is recommended. Students should be familiar with the general structure of companies, corporate governance principles, contractual obligations and creditors’ rights. No prior specialised knowledge of insolvency law is required.

The course focuses on company insolvency law and on the legal tools used to manage corporate distress, restructuring and liquidation. The course begins with an introduction to the aims and functions of insolvency law, including efficiency, creditor protection and the emergence of a rescue culture in Europe. It then examines the legal criteria for determining insolvency, as well as the distinction between going-concern and gone-concern situations. The course will then address corporate rescue and restructuring tools. Attention will be paid to negotiations with creditors and to the use of legal “breathing space” in order to support business continuity. A further part of the course will be devoted to liquidation procedures, including compulsory liquidation, voluntary liquidation and the role of the liquidator in collecting assets, investigating company affairs and distributing proceeds to creditors. The course will also examine creditor claims and asset-related issues, including the statutory waterfall, secured and unsecured creditors, preferential debts, voidable transactions, preferences, transactions at an undervalue and asset tracing. Specific attention will be given to directors’ duties, liability and ethics in the vicinity of insolvency, including wrongful trading, fraudulent trading and director disqualification. The final part of the course will focus on cross-border insolvency, including jurisdiction, the concept of Centre of Main Interests, the UNCITRAL Model Law and conflict-of-laws issues arising when assets and creditors are located in different jurisdictions.

INSOL Europe, The Evolution or Revolution of European Insolvency Law, 2024. Slides, cases and additional teaching materials will be provided by the Professor during the course. Further readings, legal materials and case studies may be indicated during the lectures in order to support class discussion and practical exercises.

The course will be taught through interactive lectures, case discussions and practical exercises. Students’ active participation during lectures is strongly encouraged. The teaching method is based on a problem-solving approach aimed at developing the students’ ability to analyse concrete insolvency and restructuring scenarios. During the course, students may be asked to discuss practical cases, evaluate restructuring options, identify creditor interests and assess the legal consequences of corporate distress situations. Slides, cases and additional materials will be provided by the Professor during the lectures.

The examination will consist of an oral interview in English. Students will be required to demonstrate knowledge and understanding of the main principles and institutions of company insolvency law, including corporate rescue, restructuring tools, liquidation, creditor claims, directors’ liability and cross-border insolvency. Students must also demonstrate the ability to apply legal principles to practical cases submitted by the Professor through concrete examples concerning corporate distress, restructuring negotiations, creditor protection and liquidation scenarios. For the purpose of awarding the final grade, the following criteria will be taken into account: (i) knowledge and understanding of the principles and institutions of company insolvency law, and ability to apply them to practical cases: 65%; (ii) correct use of technical legal terminology in English, ability to analyse relevant legal materials and acquisition of an appropriate study method: 35%.

A thesis may be assigned to students who show a strong interest in company insolvency law and who have successfully passed the examination. Preference will be given to students willing to analyse practical cases, restructuring transactions, corporate rescue tools, directors’ liability issues or cross-border insolvency matters from an operational and comparative perspective.