¹ For a comparative evaluation of the ‘pro-creditor’ nature of the US insolvency regime see the joint HM Treasury/DTI report, ‘A Review of Company Rescue and Business Reconstruction Mechanisms’ (05 2000) 38–41.Google Scholar The Review Group, however, concluded at p 33 of its report that ‘it would be wholly inappropriate to attempt to replicate Chapter 11 in the UK, where the business culture and economic environment are quite different’.

² What is now schedule B1 Insolvency Act 1986, para 64, provides that a company in administration or an officer of a company in administration may not exercise management power without the consent of the administrator. Management power is defined as meaning a power which could be exercised so as to interfere with the exercise of the administrator's powers.

³ On the relative merit of debtor-in-possession versus management-displacement insolvency regimes see Hahn, D, ‘Concentrated Ownership and Control of Corporate Reorganisations’ (2004) 4 JCLS 117.Google Scholar See also Finch, V, ‘Control and co-ordination in corporate rescue’ (2005) 25 Legal Studies 374CrossRefGoogle Scholar; Brupbacher, O, ‘Functional Analysis of Corporate Rescue Procedures: A Proposal from an Anglo-Swiss Perspective’ (2005) 5 JCLS 105.Google Scholar

⁴ See generally on similarities and differences between the two systems Armour, J, Cheffins, BR, and Skeel, DA Jr, ‘Corporate Ownership Structure and the Evolution of Bankruptcy Law: Lessons from the United Kingdom’ (2002) 55 Vand L Rev 1699.Google Scholar

⁵ It has been suggested that whether a firm should be kept together as a going concern is answered by estimating the income stream that the assets would generate if they were kept together, taking into account the risk of reorganization failure, discounting that stream to present value, and comparing it to the amount that the assets would realize if they were sold off in separate pieces–see Baird, DG and Jackson, TH, ‘Corporate Reorganizations and the Treatment of Diverse Ownership Interests: A comment of adequate protection of secured creditors in bankruptcy’ (1984) 51 U Chi Law Review 97, 109.CrossRefGoogle Scholar

⁶ See generally Hansmann, H and Kraakman, R, ‘The end of history for corporate law’ in Gordon, J and Roe, M (eds), Convergence and Persistence in Corporate Governance (CUP, Cambridge, 2004) 33.CrossRefGoogle Scholar

⁷ For a full frontal assault on Chapter 11 see Bradley, M and Rosenweig, M, ‘The Untenable Case for Chapter 11’ (1992) 101 Yale LJ 1043CrossRefGoogle Scholar; and for a defence see Warren, E, ‘The Untenable Case for the Repeal of Chapter 11’ (1992) 102 Yale LJ 437CrossRefGoogle Scholar; Whitford, WC, ‘What's Right About Chapter 11’ (1994) 72 Wash ULQ 1379.Google ScholarSee also LoPucki, LM and Whitford, WC, ‘Corporate Governance in the Bankruptcy Reorganisation of Large, Publicly Held Companies’ (1993) 141 UPa L Rev 669.Google Scholar In recent years the debate has moved on with the development of new financing techniques and new modes of Chapter 11 governance. On this see Gross, K, ‘Finding Some Trees but Missing the Forest’ (2004) 12 American Bankruptcy Institute Law Review 203, 217–18: ‘At the end of the day, the world got more complex, new markets opened, new uses of Chapter 11 were invented, new parties came to the table, lawyers and other professionals developed new strategies, and financial sophistication increased. At the end of the day, twenty-five years after the Code's passage, the secured creditor influence is but one of many influences. At the end of the day, secured creditors are one of the many players involved in a hugely complex drama. That is what twenty-five years, under the Code and in the real world, has given us.’Google Scholar

⁸ According to Professor Stuart Gilson in deciding the merits of alternative corporate reorganization one can consider whether the various systems ‘(1) allow reorganization or liquidation to be accomplished at minimum cost; (2) encourage insolvent firms to reorganize when their going concern value exceeds their liquidation value, while forcing them to liquidate when their liquidation value exceeds their going concern value; and (3) not create incentives for managers or stockholders to ‘game’ the system ex ante by taking actions that generate private benefits at the expense of firm value’: Gilson, SC, ‘Methodological Issues in Cross-Country Comparisons of Commercial Bankruptcy Law: Comment on Papers by Eisenberg-Tagashira and Rajak’ in Ziegel, JS (ed), Current Developments in International and Comparative Corporate Insolvency Law (Clarendon Press, Oxford, 1994) 262, 263.Google Scholar

⁹ see generally on cram down Friedman, J, ‘What Courts do to Secured Creditors in Chapter 11 Cram Down’ (1993) 14 Cardozo Law Review 1496, who suggests at p 1499 that ‘the traditional mystique concerning cram down which instills fear among secured creditors is exaggerated. Cram down is applied in a remarkably homogenous and predictable manner regarding secured claims’.Google Scholar

¹⁰ Report of the Review Committee on Insolvency Law & Practice (the Cork Report) (Cmnd 8558, 1982).Google Scholar

¹¹ Prentice, D, Oditah, F, and Segal, N, ‘Administration: The Insolvency Act 1986, Part 11’Google Scholar; [1994] LMCLQ 487Google Scholar, considers the reasons for the introduction of the administration procedure, its evolution and effect. See more generally Carruthers, B and Halliday, T, Rescuing Businesses: The Making of Corporate Bankruptcy Law in England and the United States (Clarendon Press, Oxford, 1998)Google Scholar; Alice, BelcherCorporate Rescue (Sweet & Maxwell, London, 1997).Google Scholar

¹² see Fletcher, IF, ‘UK Corporate Rescue’ (2004) 5 European Business Organization Law Review 119, 125.CrossRefGoogle Scholar

¹³ Productivity and Enterprise: Insolvency–A Second Chance (Cm 5234, 2001).Google Scholar

¹⁴ Schedule B1 Insolvency Act 1986, paras 14 and 22. It appears that most appointments are made by the company rather than by a bank holding a floating charge. Banks appear reluctant to make the appointment themselves, as distinct from influencing the company's choice of appointee, because of reputation concerns. On this see generally the empirical study by Frisby, Sandra on the Insolvency Service website: <http://www.insolvency.gov.uk> (11 04 2007).+(11+04+2007).>Google Scholar

¹⁵ Schedule B1 Insolvency Act 1986, paras 22 and 26.

¹⁶ ibid para 36(2).

¹⁷ In the Productivity and Enterprise White Paper it was suggested that the result would be a procedure that would be as flexible and cost-effective as administrative receivership, but one in which the administrator will owe a duty of care to all creditors, unsecured creditors will have the opportunity for input and participation and the process will be subject to the oversight and direction of the court in a public and transparent way.

¹⁸ An empirical study by Dr Sandra, Frisby on the Insolvency Service website– <http://www.insolvency.gov.uk> (11 04 2007)–reveals that in only a small minority of cases will administration lead to a genuine rescue outcome. Corporate rescue, as distinct from business, remains very much a minority pursuit.+(11+04+2007)–reveals+that+in+only+a+small+minority+of+cases+will+administration+lead+to+a+genuine+rescue+outcome.+Corporate+rescue,+as+distinct+from+business,+remains+very+much+a+minority+pursuit.>Google Scholar

¹⁹ A proposal for a CVA, whether made outside or within administration, cannot, however, affect the right of a secured creditor to enforce his security or affect the priority of a preferential creditor except with the consent of the relevant creditor–Schedule B1 Insolvency Act 1986, para 73.

²⁰ Schedule B1 Insolvency Act 1986, para 65.

²¹ Re GHE Realisations Ltd [2006] 1 WLR 287.Google Scholar

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²⁵ see the statement of the government minister, Lord, McIntosh, when piloting the legislation through the House of Lords (Hansard HL Deb vol 638 col 766 (29 07 2002)):Google Scholar

‘Company rescue is at the heart of the revised administration procedure. We want to make sure that viable companies do not go the wall unnecessarily. That is why we are restricting administrative receivership and revising administration to focus on rescue and to make it more accessible to companies as well as their creditors. That is not just for the companies themselves; it is also good for their suppliers, customers and employees. The emphasis on company rescue will create more incentive for company management to take action promptly and use the administration procedure before the situation becomes terminal. That is why the purpose directs the administrator to perform his or her functions with “objective of rescuing the company”.’

²⁶ [1995] 2 AC 394, 442.Google Scholar see also Belcher, A, Corporate Rescue (Sweet & Maxwell, London, 1997).Google Scholar

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³³ Nathalie, Martin, ‘Common-Law Bankruptcy Systems: Similarities and Differences’ (2003) 11 American Bankruptcy Institute Law Review 367, 374.Google Scholar

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⁴⁰ Concerning perverse incentives there is a famous American story involving Federal Express: ‘Federal Express was near financial collapse within a few years of its inception. The founder, Frederick Smith, took $20,000 of corporate funds to Las Vegas in despair. He won at the gaming tables, providing enough capital to allow the firm to survive’–see Stephen, Ross et al. , Corporate Finance (7th edn, McGraw-Hill/Irwin, New York, 2002) 428.Google Scholar

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⁴⁵ see the review by Jacob Ziegel in (2001) 79 Texas L Rev 1241, 1244.Google Scholar

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⁴⁷ Hunter (n 42) 519.Google Scholar

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⁴⁹ HR Rep No 595 95th Cong, 1st Session 231 (1977).Google Scholar

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⁵⁶ Sections 6 and 8 of the Company Directors Disqualification Act 1986. Liquidators and others are required to report suspected cases of unfitness to the Department of Trade and Industry disqualification unit.

⁵⁷ ‘Unfitness’ is considered by reference to the factors listed in Schedule 1 to the Act.

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⁵⁹ ibid 141.

⁶⁰ See ibid 142–3.

⁶¹ Schedule B1 Insolvency Act 1986, para 3.

⁶² see Hahn (n 3) 146.Google Scholar

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⁶⁵ see Frisby, S, ‘In Search of a Rescue Regime: The Enterprise Act 2002’ (2004) 67 MLR 247, 262CrossRefGoogle Scholar; and more tentatively Finch (n 3) 395–6: ‘The terms of EA 2002 mean that it is arguable that an administrator is obliged to pursue a going concern sale where he thinks this will serve creditors better than efforts made to rescue the company–even where it might be possible to rescue the company. Primacy is accordingly given to maximising overall returns to creditors, rather than to rescue per se.’

⁶⁶ Insolvency Act 1986 Schedule B1, para 3(1). An administrator must also perform his/her functions in the interests of the company's creditors as a whole.

⁶⁷ Schedule B1, para 3(4).

⁶⁸ See the comments by the relevant Minister, Lord McIntosh of Haringey (n 25).

⁶⁹ Schedule B1, para 49(2)(b).

⁷⁰ For somewhat different perspectives see Armour, J and Mokal, R, ‘Reforming the Governance of Corporate Rescue: The Enterprise Act 2002’ [2005] LMCLQ 28Google Scholar; Mokal, R and Armour, J, ‘The New UK Rescue Procedure–The Administrator's Duty to Act Rationally’ (2004) I International Corporate Rescue 136Google Scholar; Simmons, M QC, ‘Enterprise Act and Plain English’ [2004] Insolvency Intelligence 76.Google Scholar

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⁷⁴ See the comment at para 193 of the 1982 Cork Report (n 10): ‘In the case of an insolvent company, society has no interest in the preservation or rehabilitation of the company as such, though it may have a legitimate concern in the preservation of the commercial enterprise’. See also the empirical study by Dr Sandra Frisby on the Insolvency Service website: <http://www.insolvency.gov.uk> (11 Apr 2007).

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⁷⁶ see also the comments of the US Supreme Court in NLRB v Bildisco (1983) 465 US 513, 528Google Scholar: ‘The fundamental purpose of reorganization is to prevent a debtor from going into liquidation, with an attendant loss of jobs and possible misuse of economic resources’ citing views expressed in the US House of Representatives HR Rep No 95–595, p 220 (1977)Google Scholar: ‘The purpose of a business reorganization case, unlike a liquidation case, is to restructure a business's finances so that it may continue to operate, provide its employees with jobs, pay its creditors, and produce a return for its stockholders … It is more economically efficient to reorganize than to liquidate, because it preserves jobs and assets’.

⁷⁷ see the comments in White, JJ, ‘Death and Resurrection of Secured Credit’ (2004) 12 American Bankruptcy Institute Law Review 139, 139–40.Google Scholar

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⁷⁹ see Skeel, DA Jr, ‘Creditors’ Ball: The “New” New Corporate Governance in Chapter 11’ (2003) 152 U Pa L Rev 917, 918.CrossRefGoogle Scholar

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⁸⁴ Receivership was essentially a creditor-centred rather than a public-interest-centred remedy. The high-water mark of this analysis came with the Privy Council decision in Downsview Nominees Ltd v First City Corp Ltd [1993] AC 295Google Scholar; [1993] 3 All ER 626.Google Scholar In this case it was held that provided that a receiver and manager appointed under a debenture acted in good faith for the purpose of enabling the assets comprised in the debenture holder's security to be preserved and realised for the benefit of the debenture holder, his decisions could not be impeached even if they were disadvantageous to the company or other charge-holders, and he was subject to no further or greater liability.

⁸⁵ For a defence of receivership see Armour, J and Frisby, S ‘Rethinking receivership’ (2001) 21 OJLS 73.CrossRefGoogle Scholar

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⁸⁷ see the statement by the government minister in Hansard, Standing Committee B, Enterprise Bill, 15th Sitting (9 05 2002) col 602.Google Scholar

⁸⁸ Schedule B1 Insolvency Act 1986, paras 22 and 26.

⁸⁹ ibid, para 36(2).

⁹⁰ See generally Davies, S (ed), Insolvency and the Enterprise Act 2002 (Jordans, Bristol, 2003) 40–1.Google Scholar

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⁹⁵ see generally for a discussion of these issues Skeel, Jr, 1998 (n 91) 1353–8Google Scholar; Skeel, Jr, 2001, (n 91) ch 2.Google Scholar

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⁹⁸ see generally Skeel, Jr, 1998 (n 91) 1368–70.Google Scholar

⁹⁹ see generally Securities and Exchange Commission Report on the Study and Investigation of the Work, Activities, Personnel and functions of Protective and Reorganization Committees volumes 1–8 (1937–1940)Google Scholar and see generally the discussion in Skeel, Jr, 1998 (n 91) 1369–70.Google Scholar

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¹⁰¹ In SEC v United States Realty & Improvement Co (1940) 310 US 434 the Supreme Court, however, leaned against publicly held companies using Chapter XI.Google Scholar

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¹⁰⁵ see generally Skeel, Jr, 1998 (n 91) 1375.Google Scholar

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¹⁰⁸ See generally Armour, Cheffins and Skeel Jr (n 4); and see also Hahn (n 3).

¹⁰⁹ This is referred to as ‘ex post’ because of the after-the-fact nature of the correctives–see Skeel, Jr, 1998 (n 91) 1328.Google Scholar

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¹¹⁶ ibid 1775–6: ‘If such pressure develops and ultimately yields the creation of a Chapter 11 option for larger firms, the end result would be what our refined evolutionary theory of corporate bankruptcy and corporate governance would suggest: diffuse share ownership, dispersed debt, and manager-driven bankruptcy law. The available evidence suggests that these various predictions are turning out to be true. To start, there is evidence that banks already are losing their near hegemony over debt finance for widely held UK firms. In recent years, British firms have increasingly turned to other institutional lenders, such as insurers and pension funds for debt financing. Although the market for public debt remains much smaller than in the US, it has significantly increased in recent years … With respect to law reform, there has been lobbying of the type the reconfigured evolutionary theory would predict.’

¹¹⁷ see Martin, (n 33) 397Google Scholar: ‘Aussies share the English distrust of the American debtor in possession system, finding it mired by the potential misdeeds of existing management’; and her comment at p 404: ‘The attitude down under seems to be if a business fails, it should be pushed aside so others can fill the gap’. For a somewhat different perspective see Cheffins, BR, ‘Corporate Governance Convergence: Lessons from Australia’ (2002) 16 Transnational Lawyer 13Google Scholar, who makes the point, inter alia, that Australia's listed companies exhibit a far higher degree of ownership concentration than do those of UK listed companies. Cheffins also discusses the implications of the Australian example for theories of Anglo-American insolvency law at pp 37–8.Google Scholar

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¹²⁰ See Insolvency Act 1986, section 1A and Schedule A1 as amended by section 1 and Schedule 1 Insolvency Act 2000.

¹²¹ Basically a company is a small company if it meets two of the following three criteria: (1) annual turnover not greater than £5.6m, (2) balance sheet total not more than £2.8m and (3) not more than 50 employees.

¹²² On the ‘London Approach’ see generally Brierley, P and Vlieghe, G, ‘Corporate workouts, the London Approach and financial stability’ [1999] Financial Stability Review 168Google Scholar; Kent, P, ‘Corporate Workouts–A UK Perspective’ (1997) 6 International Insolvency Review 165CrossRefGoogle Scholar; Armour, J and Deakin, S, ‘Norms in Private Bankruptcy: the “London Approach” to the Resolution of Financial Distress’ [2001] Journal of Corporate Law Studies 21.CrossRefGoogle Scholar

¹²³ see Armour, , Cheffins, and Skeel, Jr (n 4) 1774.Google Scholar

¹²⁴ An important empirical study suggests the existence, even in the case of small and medium sized companies, of an elaborate rescue process outside formal procedures. Banks, it appears, use their position as secured creditors to encourage or force financially distressed firms to undergo restructuring that would include downsizing and management replacement–see Franks, J and Sussman, O, ‘The Cycle of Corporate Distress, Rescue and Dissolution: A Study of Small and Medium Size UK Companies’ (2000).Google Scholar This study was sponsored by the DTI/Treasury Working Group on Company Rescue and Business Reconstruction Mechanisms. see also Cook, G, Pandit, N, and Milman, D, ‘Formal Rehabilitation Procedures and Insolvent Firms: Empirical Evidence on the British Company Voluntary Arrangement Procedure’ (2001) 17 Small Business Economics.CrossRefGoogle Scholar

¹²⁵ Gilson, S, ‘Management Turnover and Financial Distress’ (1989) 25 Journal of Financial Economics 241, 261CrossRefGoogle Scholar, finding that ‘in any given year, 52% of sampled firms experience a senior management change if they are either in default on their debt, bankrupt, or privately restructuring their debt to avoid bankruptcy’; and see also Gilson, S, ‘Bankruptcy, Boards, Banks, and Blockholders: Evidence on Changes in Corporate Ownership and Control When Firms Default’ (1990) 27 Journal of Financial Economics 355, 386, stating that ‘on average, only 46% of incumbent directors and 43% of CEO's remain with their firms at the conclusion of the bankruptcy or debt restructuring’.CrossRefGoogle Scholar

¹²⁶ LoPucki and Whitford, (n 7).

¹²⁷ According to Carruthers, B and Halliday, T, Rescuing Business: The Making of Corporate Bankruptcy Law in England and the United States (Clarendon Press, Oxford, 1998) 265Google Scholar, the Chapter 11 process ‘is not a safe haven for management’. see generally Broude, R, ‘How the Rescue Culture Came to the United States and the Myths that Surround Chapter 11’ (2001) 16 Insolvency Law and Practice 194.Google Scholar

¹²⁸ ‘The End of Bankruptcy’ (2002) 55 Stan L Rev 751.CrossRefGoogle Scholar

¹²⁹ US v Whiting Pools Inc (1983) 462 US 198, 203.Google Scholar

¹³⁰ see also Adams, Charles W, ‘An Economic Justification for Corporate Reorganizations’ (1991) 20 Hofstra L Rev 117, 133Google Scholar: ‘[M]ost assets are probably not firm-specific, and so, most insolvent corporations will not have substantially greater going concern than liquidation values and, consequently, will not be good candidates for an effective reorganization.’

¹³¹ ‘The End of Bankruptcy’ (2002) 55 Stan L Rev 751, 788.CrossRefGoogle Scholar

¹³² In United Timbers Association of Texas v Timbers of Inwood Forest Associates Ltd (1988) 484 US 365Google Scholar, the US Supreme Court gave a very firm push in the direction of speedier reorganizations. It said that once the creditor establishes that the debtor has no equity in the collateral, the debtor has the burden of establishing that the collateral is necessary to an effective reorganization. What this requires is not merely a showing that if there is conceivably to be an effective reorganization, this property will be needed for it, but that the property is essential for an effective reorganization that is in prospect. This means that there must be a reasonable possibility of a successful reorganization within a reasonable time. For criticism of the pre-Inwoods state of affairs see Baird, DG and Jackson, TH, ‘Corporate Reorganizations and the Treatment of Diverse Ownership Interests: A Comment on Adequate Protection of Secured Creditors in Bankruptcy’ (1984) 51 U Chi L Rev 97, 126–7CrossRefGoogle Scholar: ‘A Chapter 11 proceeding typically buys time for the managers, the shareholders, and other junior owners at the expense of the more senior ones … Bankruptcy judges sometimes seem inclined to do little to remedy this state of affairs. A few seem to show either an inability or unwillingness to comprehend the possibility that secured credit may be something more than a perverse and unfair creature of state law that should be thwarted at every possible turn. Even more remarkable is their wonderful capacity for hope, their unshakeable faith that given time, the firm's ship will come in. Often, bankruptcy judges seem to think that markets systematically undervalue firms that have filed petitions in bankruptcy. A bankruptcy judge may insist that he, not the market, is the best one positioned to set a value on a firm in distress, even though year after year in case after case his valuations prove wildly inflated.’

¹³³ see Warren, E and Westbrook, JL, ‘Secured Party in Possession’ (2003) 22 American Bankruptcy Institute Journal 12Google Scholar: ‘We have a new form of chapter 11 emerging in the courts. Having invented the DIP (debtor-in-possession), American lawyers are now creating the SPIP (secured-party-in-possession). More and more chapter 11 chases seem to be no more than vehicles through which secured parties may enjoy their Article 9 rights under the umbrella, and the protective shield, of the bankruptcy laws.’

¹³⁴ see Baird, DG and Rasmussen, RK, ‘Four (or Five) Easy Lessons From Enron’ (2002) 55 Vand L Rev 1787, 1807Google Scholar: ‘In the case of a large firm in bankruptcy, we find that, at the moment Chapter 11 is filed, a revolving credit facility is already in place that entrusts decision making authority to a single entity. This entity will often step in and replace management. It will make the necessary operational decisions before Chapter 11 begins.’

¹³⁵ see generally D Skeel Jr (n 78); Skeel, D Jr, ‘The Past, Present and Future of Debtor-in-Possession Financing’ (2004) Cardozo Law Review 101Google Scholar; Baird, DG, ‘The New Face of Chapter 11’ (2004) 12 American Bankruptcy Institute Law Review 69.Google Scholar

¹³⁶ For an argument that market failure could induce too much liquidation in the new world of Chapter 11 see Adler, BE, ‘Bankruptcy Primitives’ (2004) 12 American Bankruptcy Institute Law Review 219, 222.Google Scholar

¹³⁷ see DA Skeel Jr (n 78) 918–19.Google Scholar

¹³⁸ see Douglas Baird, G and Rasmussen, Robert K (n 22) 751–2Google Scholar: ‘Corporate reorganizations have all but disappeared. Giant corporations make headlines when they file for Chapter 11, but they are no longer using it to rescue a firm from imminent failure. Many use Chapter 11 merely to sell their assets and divide up the proceeds … Even when a large firm uses Chapter 11 as something other than a convenient auction block its principal lenders are usually already in control and Chapter 11 merely puts in place a preexisting deal. Rarely is Chapter 11 a forum where the various stakeholders in a publicly held firm negotiate among each other over the firm's destiny.’

¹³⁹ But for a different perspective see LoPucki, LM ‘The Nature of the Bankrupt Firm: A Reply to Baird and Rasmussen's The End of Bankruptcy’ (2003) 56 Stanford Law ReviewGoogle Scholar, who concludes by saying ‘Big-case bankruptcy reorganizations have not ended. They are booming … Baird and Rasmussen's view of the bankrupt firm as merely an asset-owning entity misses the firm's essence. Coase's view of the bankrupt firm as a relationship among people captures it. Baird and Rasmussen's firm has no going concern value and so it makes no sense to reorganise it. Coase's firm may have going concern value, and so it makes sense to reorganize it if the relationships are working or can easily be fixed. Baird and Rasmussen's firm does not fit the data; Coase's firm does.’

¹⁴⁰ See, eg, Skeel, D Jr (n 135) 117–25 who refers to DIP lenders bootstrapping earlier unsecured debt through cross-collateralization provisions in new financing agreements.Google Scholar

¹⁴¹ For an early perspective see Jackson, TH and Scott, RE, ‘An Essay on Bankruptcy Sharing and the Creditors' Bargain’ (1989) 75 Va L Rev 155, 159CrossRefGoogle Scholar: ‘The problem of transferring decisionmaking power from the equity owners … is compounded by the associated problem that no other class may sufficiently reflect the interests of the claimants taken as a whole. Thus, the objective of the collective is never entirely congruent with the objective of any of the constituent parts.’

¹⁴² see Skeel, Jr (n 135) 118.Google Scholar

¹⁴³ If too many firms liquidate rather than reorganize, industry may become concentrated in the hands of a few major players.

¹⁴⁴ See, however, the comment by Gross, K (n 7) 217–18Google Scholar: ‘Yes, secured creditors did make some gains, some of which were not originally contemplated. Yes, they may control some cases through DIP financing packages. But, there are a host of other things that have been operating since 1978 that explain how large Chapter 11 cases are working and why secured creditors have done that which they have done and why, in some instances, they are not the star of the show … At the end of the day, the world got more complex, more markets opened, new uses of Chapter 11 were invented, new parties came to the table, lawyers and other professionals developed new strategies, and financial sophistication increased.’

¹⁴⁵ See Warren and Westbrook (n 133).

¹⁴⁶ see the comment in Westbrook (n 32) 87: ‘if an American banker is very, very good, when he dies he will go to the United Kingdom. British banks have far more control than an American secured lender could ever hope to have. Receiverships on the British model are unknown and almost unthinkable in the US. A US banker could barely imagine a banker's Valhalla in which a bank could veto a reorganization as a UK bank may effectively veto an administration by appointing an administrative receiver’. This comment must now, of course, be seen in the light of the changes to the administration procedure introduced by the Enterprise Act 2002.Google Scholar