Business Sustainability and Insolvency Proceedings - The EU Perspective

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http://hdl.handle.net/10138/316995

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Linna , T 2020 , ' Business Sustainability and Insolvency Proceedings - The EU Perspective ' , Journal of sustainability research , vol. 2 , no. 2 , e200019 . https://doi.org/10.20900/jsr20200019

Title: Business Sustainability and Insolvency Proceedings - The EU Perspective
Author: Linna, Tuula
Contributor: University of Helsinki, Faculty of Law
Date: 2020-04
Language: eng
Number of pages: 28
Belongs to series: Journal of sustainability research
ISSN: 2632-6582
URI: http://hdl.handle.net/10138/316995
Abstract: Business sustainability refers to economic sustainability performance that promotes profitability and to non-financial sustainability that may or may not create profitability. This paper concentrates on the relation between business sustainability and insolvency proceedings by asking what role business sustainability plays when choosing between restructuring (rescue) and liquidation proceedings. This choice is based on two tests: a viability test and a best interest of creditors test, the latter meaning that no dissenting creditor should be worse off in restructuring than in liquidation proceedings. In addition, the paper asks what role business sustainability plays when making the choice between restructuring and liquidation and what the consequences of this choice are for business sustainability elements. In addition, the paper asks who the stakeholders for business sustainability are in insolvency situations. The finding of the study is that creditor interest should be better balanced with non-financial sustainability, but with the requirement that creditors know the risks beforehand and are able to protect their interests, for example, through securities. Regarding environmental hazards, the paper suggests a “super responsibility” of bankruptcy estates to handle environmental problems, according to the precedent of the Canadian Supreme Court.
Subject: 513 Law
business sustainability
economic sustainability performance
non-financial sustainability
insolvency proceedings
restructuring
liquidation
environmental hazard
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