Key objectives of a simplified insolvency regime

• Author: United Nations Commission on International Trade Law
• Pages: 5-5

5

UNCITRAL Legislative Recommendations

on Insolvency of Micro- and Small

Enterprises

A. Key objectives of a simplied

insolvency regime

271. States should provide for a simplied insolvency regime and for that purpose

consider the following key objectives:

(a) Puing in place expeditious, simple, exible and low-cost insolvency

proceedings (henceforth referred to as “simplied insolvency proceedings”);

(b) Making simplied insolvency proceedings available and easily accessible to

micro- and small enterprises (MSEs);

(c) Promoting the MSE debtor’s fresh start by enabling expedient liquidation

of non-viable MSEs and reorganization of viable MSEs through simplied insolvency

proceedings;

(d) Ensuring protection of persons aected by simplied insolvency proceed-

ings, including creditors, employees and other stakeholders (henceforth referred to

as “parties in interest”) throughout simplied insolvency proceedings;

(e) Providing eective measures to facilitate participation by creditors and other

parties in interest in simplied insolvency proceedings, and to address creditor

disengagement;

(f ) Implementing an eective sanctions regime to prevent abuse or improper

use of the simplied insolvency regime and to impose appropriate penalties for

misconduct;

(g) Addressing concerns over stigmatization because of insolvency; and

(h) Where reorganization is feasible, preserving employment and investment.

ose objectives are in addition to the objectives of an eective insolvency law as

set out in recommendations 1–5, such as the provision of certainty in the market

to promote economic stability and growth, maximization of value of assets, pres-

ervation of the insolvency estate to allow equitable distribution to creditors, equi-

table treatment of similarly situated creditors, ensuring transparency and

predictability, recognition of existing creditor rights and establishment of clear

rules for ranking of priority.