The questions of when – and even a more important one – under what conditions – insolvency protection is to be granted to certain debtor companies are pivotal in determining the efficacy of any insolvency case.
By entering insolvency proceedings, a debtor might at least receive such benefits as,
a) stop the possible race of competing creditors against the debtor’s assets and
b) obtain the right to courtgoverned restructuring based on the system of instalments, write-offs and haircuts, usually not accessible in situations when most of the creditors disapprove any plan.
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