A weak vessel? Why the insolvency regime for partnerships and LLPs is failing to protect the salvage or diminish the number of wrecks

Berry, E. ORCID: 0000-0001-8325-5356, 2018. A weak vessel? Why the insolvency regime for partnerships and LLPs is failing to protect the salvage or diminish the number of wrecks. Nottingham Business and Insolvency Law eJournal. ISSN 2053-1648 (Forthcoming)

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Abstract

In the 19th century, during the passage of what would become the Bankruptcy Act 1883, the objects of a good bankruptcy law were stated to be ‘the honest administration of bankrupt estates, with a view to the fair and speedy distribution of the assets’, ‘to improve the general tone of commercial morality, to promote honest trading, and to lessen the number of failures’ - more pithily summarised as being ‘to protect the salvage, and also to diminish the number of wrecks’. However, in contrast to the continuing success of the 19th and early 20th century legislation governing solvent partnerships and LLPs, and despite a similar statement of aims in the Cork Report a hundred years later, the laws governing insolvent partnerships and LLPs today fail to achieve these tasks, not least because of the under-theorisation of those laws. The root of the problem is that they are founded on legislation drafted for companies and individuals, and this is inappropriate, in theory and in practice, to partnerships and LLPs. The result is that partnership and LLP insolvency laws remain, as the law governing insolvent partnerships was noted to be in 1882, in a state “for which nobody has yet given an intelligible reason”. They consequently require substantial and wide-ranging reform to improve their transparency, omit or adapt inappropriate concepts, clarify decision-making procedures, and remove partnership winding up and partner disqualification from their ambit.

Item Type: Journal article
Publication Title: Nottingham Business and Insolvency Law eJournal
Creators: Berry, E.
Publisher: Centre for Business and Insolvency Law, Nottingham Law School
Date: 12 May 2018
ISSN: 2053-1648
Divisions: Schools > Nottingham Law School
Depositing User: Jonathan Gallacher
Date Added: 04 Jul 2018 09:54
Last Modified: 01 Aug 2018 10:05
URI: http://irep.ntu.ac.uk/id/eprint/33992

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