Zahra Mahmudi; Mahdi Montazar; Hamid reza Adabi; Eisa Kheiri
Abstract
The degree of corporate insolvency varies significantly between enterprises. However, a formal classification of these insolvency degree is missing. Additionally, the appropriateness of available proceedings with different degrees of bankruptcy is still a matter of active debate. In this ...
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The degree of corporate insolvency varies significantly between enterprises. However, a formal classification of these insolvency degree is missing. Additionally, the appropriateness of available proceedings with different degrees of bankruptcy is still a matter of active debate. In this article, we first introduce three distinct stages of insolvency, namely the third degree (likely), the second degree (final), and the first degree (critical). We then perform a comparative analysis of Iranian and French law to study the extent to which judicial interventions match the introduced degrees of corporate insolvency. Iranian law provides a wide range of procedures for third-degree insolvency, including ″trade insolvency″ ″immediate settlement″, ″temporary control″, ″halt prevention″, ″production support″, and ″preventive scheme of arrangement. ″ French law, on the other hand, provides mechanisms for ″alert″, ″ad hoc representative″, ″compromise arrangement″, ″conciliation″, and ″safeguard proceedings." In the second degree case, both countries offer proceedings for ″scheme of arrangement″ and ″reorganization planning; ″ however, their logic and executive processes differ. Finally, for the first-degree insolvency, both countries ultimately end in liquidation proceedings.
