Property Issues of Insolvent Enterprises and Bankruptcy Proceeding

Abstract

Any bankruptcy case tends to involve the scrutinized examination of the condition of the debtor's property. The result is based on the indivisibility of property principle. Recently, a French lawmaker aiming to find debtors and creditors for a certain category of citizens and the protection from the consequences of insolvency has had to question the traditional indivisibility of property principle. This leads to making complicated the legal system under discussion. The article analyzes the legal mechanism facilitating to settle the issues of insolvent enterprises. The evolution of the French law regulating the insolvency of enterprises is very characteristic. The French legislation on bankruptcy has seen serious changes in the last 30 years. Hence, the early 2000s have become the turning point in the history of the legislation regulating bankruptcy. It has allowed differentiated regulation of the debtor's property which is subject to bankruptcy proceeding for the first time. In other words, the regulation of the property of the debtor which is subject to bankruptcy proceeding is becoming a variable. However, to make French law appealing to foreign investors, legislators introduced the mechanism of guarantee payments for creditors based on the division of property, which is common in common law countries. As to the property of enterprises, the corporate law evolution is still incomplete. A very French tendency to reform generates the ambition to develop sophisticated mechanisms to meet a widening range of specific needs. This makes the law tangential to its major aim, i.e. to compile general norms of law and will probably lead to the development of more complicated mechanisms unless a drastic simplification of our legislation happens by chance under the influence of foreign laws which will show that keeping simple is a key to achieving perfect results.