12.11 Suggestions for further research

Documentgegevens:

N.W.A. Tollenaar, datum 16-10-2016

Datum: 16-10-2016
Auteur: N.W.A. Tollenaar
Vakgebied(en): Insolventierecht / Faillissement

Many of the topics I have touched upon in this book have not been dealt with extensively, but have been discussed only in high-level terms with a view to providing a basis for further research and discussion.

Topics that need to be researched and developed further include:

(i): Valuation in the context of restructuring, including the design of an efficient legal process for determining valuation that strikes the right balance between integrity and efficiency of process, and that can be applied without necessarily having to follow a voting procedure where a vote is not required (Chapter 5 and section 8.6).
(ii): Whether, and the extent to which, fundamental rights such as the principle of open justice and the right to a fair trial under Article 6 of the European Convention on Human Rights require that legal proceedings and judicial decisions in the context of pre-insolvency proceedings be made public (subsection 8.2.1).
(iii): The desirability of introducing the role of a silent monitor and how such a monitor might operate (subsection 8.2.4).
(iv): Continuing trading and the issue of unlawful transactions and preference in the twilight zone that exists while pre-insolvency proceedings are pending (subsection 8.2.6).
(v): The treatment of executory contracts in the context of pre-insolvency proceedings (subsections 8.2.7-8.2.8).
(vi): The need for a liquidation test as a general confirmation requirement in the light of fundamental property rights (subsection 8.9.3.3).
(vii): The ability to settle disputed claims by a majority decision in light of fundamental rights to property and a fair trial (section 8.10); and
(viii): The coordination of, and selection rules for, competing plans.

There are of course important further areas of research on pre-insolvency proceedings – topics that this book has not considered at all – such as the securities law, corporate law, labour law, tax and international aspects of pre-insolvency proceedings.

My expectation is that even after the introduction of an efficient pre-insolvency plan procedure, liquidation proceedings will still be used in the vast majority of cases. Pre-insolvency proceedings will be the instrument of choice only in the larger exceptional cases. I am hopeful that this study has managed to highlight the importance of liquidation and efficient liquidation proceedings.

The currently available individual and collective liquidation proceedings fall short in my view. They provide only for enforcement against concrete individual goods and individualised rights. In a simple economy in which present value resides mainly in concrete individual assets, this may be sufficient. In a more developed economy, such as in the Netherlands, however, more and more value is tied up in contracts and in the abstract capacity to generate cash flows with a complex of assets and activities that, as an operating whole, are worth more than their inactive constituent parts. Dutch enforcement and insolvency law is not attuned to dealing with value in contracts or with the abstract notion of value more generally. Developing effective and efficient proceedings for the enforcement of claims against a business as an operational, cash flow generating whole, and enabling creditors to recover value captured in earnings capacity and value in abstract form more generally, together constitute, in my opinion, a field that is ripe for further research and an area in which significant improvement can be achieved in the existing individual and collective enforcement systems.