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The role of enterprise principles in shaping management duties at times of crisis

Mevorach, Irit

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Authors

Irit Mevorach



Abstract

The enterprise group form presents special risks of mismanagement when entities in the group are in financial trouble. At the same time, pursing a group interest might assist in resolving the financial difficulties. In any event, delineating rules for this situation is challenging, given the variety of group structures and potential erosion of the benefit of limited liability when the regulation targets the whole group. The conflict is between “entity law” (which addresses each group entity separately) and “enterprise principles” (which address the group as a whole). There is scope for crafting the “wrongful trading” provision, now being adopted as an international standard, to accommodate the group scenario. In this context, enterprise principles should function only to help ascertain the commercial reality, rather than to override entity law.

Citation

Mevorach, I. (2013). The role of enterprise principles in shaping management duties at times of crisis. European Business Organization Law Review, 14(4), https://doi.org/10.1017/s1566752912001279

Journal Article Type Article
Publication Date Dec 1, 2013
Deposit Date Sep 2, 2015
Publicly Available Date Mar 29, 2024
Journal European Business Organization Law Review
Print ISSN 1566-7529
Electronic ISSN 1566-7529
Publisher Springer Verlag
Peer Reviewed Peer Reviewed
Volume 14
Issue 4
DOI https://doi.org/10.1017/s1566752912001279
Public URL https://nottingham-repository.worktribe.com/output/1000660
Publisher URL http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=9149904&fileId=S1566752912001279

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