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- Title
Mandatory disclosure in corporate debt restructuring via schemes of arrangement: A comparative approach.
- Authors
Wan, Wai Yee; Watters, Casey
- Abstract
Creditors often face significant information asymmetry when debtor companies seek to restructure their debts. In the United Kingdom, it is mandatory for debtor companies, seeking to invoke the courts' jurisdiction to restructure their debts via schemes of arrangement (schemes), to disclose material information in the explanatory statement to enable the creditors to make an informed decision as to how to exercise their votes in creditors' meetings. The English schemes have been transplanted into common law jurisdictions in Asia, including Hong Kong and Singapore. However, due to the differences in the shareholding structures and the kinds of debts that are sought to be restructured in the UK and Hong Kong/Singapore, this transplantation gives rise to the question as to whether information asymmetry is in fact adequately addressed in the scheme process. Drawing from the experiences of Hong Kong and Singapore, we argue that there are three principal concerns in the current disclosure regimes: how debtors disclose the analysis as to the returns pursuant to the best available alternative option if the schemes do not proceed; how debtors disclose advisors' fees; and the equality of provision of information in the scheme process.
- Subjects
INTERNATIONAL bankruptcy; INTERNATIONAL law; BUSINESS failures; COMMERCIAL law; BANKRUPTCY jurisdiction
- Publication
International Insolvency Review, 2021, Vol 30, pS111
- ISSN
1180-0518
- Publication type
Article
- DOI
10.1002/iir.1425