Vol 16 (2019) - Issue 5

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Insolvency Reform Trends in Developing Countries

Synopsis
The pace of insolvency framework reforms in developing countries has increased after a few years of moderate activity. This article highlights four legislative and institutional trends of those reforms. First, in the last few years, over 20 developing countries have added features to benefit small businesses to their insolvency laws. Second, other common recent legislative reforms have been aimed at preserving value and saving viable businesses; they involve reorganisation regimes and business continuity. Third, while legislative changes are at the heart of many reforms, there is an increasing recognition by countries that textual improvements are necessary but not sufficient. They must be accompanied by a robust program of training and awareness raising, especially for judges. Finally, legislative reforms must often be accompanied by implementing regulations, as is frequently the case with frameworks for insolvency representatives. These frameworks for insolvency representatives are an area of increased activity in developing countries.