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The Rise of ‘Group Solution’ in Insolvency Law and Bank Resolution

This article traces the emergence of the concept of ‘group solution’ and its manifestations in insolvency law and bank resolution as an alternative to the rigid entity-by-entity approach. The rise of this concept can be linked to the recognition of the specificity of problems related to the insolven...

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Autor principal: Kokorin, Ilya
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Springer International Publishing 2021
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8319584/
http://dx.doi.org/10.1007/s40804-021-00220-4
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author Kokorin, Ilya
author_facet Kokorin, Ilya
author_sort Kokorin, Ilya
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description This article traces the emergence of the concept of ‘group solution’ and its manifestations in insolvency law and bank resolution as an alternative to the rigid entity-by-entity approach. The rise of this concept can be linked to the recognition of the specificity of problems related to the insolvency of multinational enterprise groups, arising from group operational and financial interconnectedness. This has not happened at once, but has resulted from the evolution of views and ideas, evident in hard and soft law instruments of the 2000s and the 2010s. In light of this important development the article explores the concept of a group solution, its rationale, scope of application and limitations. It concludes that despite the gradual acceptance of the group phenomenon, a group solution has not been formed as a coherent and well-defined legal principle. Instead, it represents a variety of approaches, tools and practices, which pursue different policy objectives underpinned by different societal values. Among them are asset value maximization, business rescue, the protection of financial stability and the preservation of banks’ critical functions. With all its flexibility, a group solution has one pervasive limitation—it cannot trump the interests of individual group members and their creditors. At the same time, in order to realize the full potential of a group solution, it is necessary to embrace the group-sensitive and forward-looking interpretation of creditors’ interest, facilitating commercially sensible and practical group solutions.
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spelling pubmed-83195842021-07-29 The Rise of ‘Group Solution’ in Insolvency Law and Bank Resolution Kokorin, Ilya Eur Bus Org Law Rev Article This article traces the emergence of the concept of ‘group solution’ and its manifestations in insolvency law and bank resolution as an alternative to the rigid entity-by-entity approach. The rise of this concept can be linked to the recognition of the specificity of problems related to the insolvency of multinational enterprise groups, arising from group operational and financial interconnectedness. This has not happened at once, but has resulted from the evolution of views and ideas, evident in hard and soft law instruments of the 2000s and the 2010s. In light of this important development the article explores the concept of a group solution, its rationale, scope of application and limitations. It concludes that despite the gradual acceptance of the group phenomenon, a group solution has not been formed as a coherent and well-defined legal principle. Instead, it represents a variety of approaches, tools and practices, which pursue different policy objectives underpinned by different societal values. Among them are asset value maximization, business rescue, the protection of financial stability and the preservation of banks’ critical functions. With all its flexibility, a group solution has one pervasive limitation—it cannot trump the interests of individual group members and their creditors. At the same time, in order to realize the full potential of a group solution, it is necessary to embrace the group-sensitive and forward-looking interpretation of creditors’ interest, facilitating commercially sensible and practical group solutions. Springer International Publishing 2021-07-29 2021 /pmc/articles/PMC8319584/ http://dx.doi.org/10.1007/s40804-021-00220-4 Text en © The Author(s) 2021 https://creativecommons.org/licenses/by/4.0/Open AccessThis article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/ (https://creativecommons.org/licenses/by/4.0/) .
spellingShingle Article
Kokorin, Ilya
The Rise of ‘Group Solution’ in Insolvency Law and Bank Resolution
title The Rise of ‘Group Solution’ in Insolvency Law and Bank Resolution
title_full The Rise of ‘Group Solution’ in Insolvency Law and Bank Resolution
title_fullStr The Rise of ‘Group Solution’ in Insolvency Law and Bank Resolution
title_full_unstemmed The Rise of ‘Group Solution’ in Insolvency Law and Bank Resolution
title_short The Rise of ‘Group Solution’ in Insolvency Law and Bank Resolution
title_sort rise of ‘group solution’ in insolvency law and bank resolution
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8319584/
http://dx.doi.org/10.1007/s40804-021-00220-4
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