CREDITORS’ SATISFACTION, FAIR DISTRIBUTION, OR AVOIDING THE STRUGGLE FOR SURVIVAL – WHICH PUBLIC INTERESTS IS CORPORATE INSOLVENCY LAW SUPPOSED TO SERVE?

Abstract

For a long time, insolvency proceedings were understood as a special civil law procedure with the aim of maximizing creditor satisfaction. To the extent that public interests played a role in this, it was a matter of giving preferential treatment to particular groups of creditors. This was expected to contribute to the realization of sociopolitical values. For good reasons, such values are receiving less and less consideration in insolvency law. Instead, it has been recognized that proper structuring of the legal relationship between the debtor company and its creditors is likely to minimize macroeconomic damage in the public interest. This has led to a substantial change in the objectives of insolvency law, which – especially thanks to the Restructuring Directive (2019/1023/EU) – has arrived in all European legal systems. This article traces the paradigm shift and shows, using the example of German and Polish insolvency law, that despite having its foundations in European law, it has not yet been fully internalized in the legal systems of all Member States.