Micro, Small, and Medium Enterprise Insolvency: A Modular Approach

Mokal, Riz; Davis, Ronald; Mazzoni, Alberto; Mevorach, Irit; Romaine, Barbara; Sarra, Janis; Tirado, Ignacio; Madaus, Stephan

Abstract

This volume examines the current resolution process for distressed micro, small, and medium enterprises (MSMEs), and proposes a different, more appropriate, ‘modular’ approach to the treatment of such entities when faced with insolvency proceedings. MSMEs play a vital role in virtually all global economies. They are a primary means of employment and the vehicle by which entrepreneurs bring new business propositions to the market and deliver a range of products and services to local economies. MSMEs tend to be more reliant than larger businesses on favourable legal and regulatory climates in order to survive and thrive. Yet in assuming an extensive insolvency estate of significant worth, the presence of creditors and other concerned stakeholders to participate in and oversee the process, and the extensive involvement of courts and insolvency and legal professionals, insolvency regimes are often more tailored to the circumstances of larger businesses. These assumptions and features generally sit incongruously with the reality of MSMEs, whose estates characteristically have modest value and many of whose stakeholders tend to be disinterested in the MSME’s insolvency process. The Modular Approach developed in this text addresses the imbalances, inconsistencies, and lack of supervision which are often apparent in the treatment of insolvent MSMEs. The volume provides an overview of existing approaches to MSME insolvency, the place of MSMEs in the global economy, and the particular needs of MSMEs in financial distress. It then sets out the procedural framework, policy objectives, and key components of the Modular Approach, detailing how a choice of modules enables national policymakers a more flexible process for resolution. The volume outlines the roles, positions, and obligations of key stakeholder groups, and explains the managerial, administrative, and judicial functions of this approach. Finally, it explains how elements of the broader legal system should be aligned with, and supportive of, the optimal functioning of the Modular Approach.

Citation

Mokal, R., Davis, R., Mazzoni, A., Mevorach, I., Romaine, B., Sarra, J., …Madaus, S. (2018). Micro, Small, and Medium Enterprise Insolvency: A Modular Approach. Oxford, UK: Oxford University Press (OUP)

• Book Type: Authored Book
• Acceptance Date: Nov 1, 2018
• Publication Date: Oct 17, 2018
• Deposit Date: Nov 26, 2018
• Publisher: Oxford University Press (OUP)
• ISBN: 9780198799931
• Keywords: MSMEs, insolvency, stakeholders, financial distress, entrepreneurial bankruptcy, discharge, creditors, accountability, policy objectives, policymakers
• Public URL: https://nottingham-repository.worktribe.com/output/1222810
• Publisher URL: https://global.oup.com/academic/product/micro-small-and-medium-enterprise-insolvency-9780198799931?cc=gb&lang=en&