There is an increasing tendency to create an accelerated judicial approach to business sales by plaiting the informal approach and the state-supplied statutory approach when dealing with corporate distress. This article investigates the extent to which formal insolvency procedures in the UK and the USA can be customised through pre-planning to achieve business sales and critically evaluates the challenges brought about by the plaiting. It is argued that the accelerated approach to business sales in insolvency tends to shift the key properties of the statutory procedure from creditor coordination and plan formulation towards verification of pre-arranged transactions. In this way it creates a vacuum of control over the quality of business decision-making and eliminates the inclusiveness of the statutory procedure leaving ample room for rent-seeking by insiders. To mitigate these deficiencies the article suggests a more responsive approach with increased accountability and better-equipped evaluation to control abuse.
- Accelerated business sales
- section 363(b) sales