David Milman

A resource-based analysis of bankruptcy law, SMEs and corporate recovery

The UK Company Voluntary Arrangement (CVA) is an early example of a bankruptcy regime designed to aid the rescue of financially distressed SMEs. Its efficacy hinges on its application to aid only viable companies with liquidation as the preferred option for companies that are not viable. This article proposes the resource-based view as a theoretical means to assess the viability of bankrupt SMEs. Seven hypotheses are tested and provide support for the central proposition, that a company which has resource strength, but is pushed into bankruptcy by temporary factors, is more likely to succeed in a CVA. The article concludes that the resource-based view is useful for analysing the viability of bankrupt companies and that well-designed bankruptcy law can promote SMEs and entrepreneurship.

Formal Rehabilitation Procedures and Insolvent Firms: Empirical Evidence on the British Company Voluntary Arrangement Procedure

The British Company Voluntary Arrangement (CVA) is a relatively new debtor rehabilitation process intended to help financially troubled companies, particularly SMEs, resolve their difficulties without being forced into liquidation by secured creditors anxious to recover their funds. This paper is based on a survey conducted by Milman and Chittenden for the Association of Chartered Certified Accountants that is the largest and most comprehensive on the subject of British CVAs. It has three principal objectives: (i) to outline the defining characteristics of CVAs; (ii) to analyse the relationships between CVA performance and contextual factors; (iii) to provide policy recommendations based on those findings. Among other things we find that CVA success is most closely associated with sound fundamental prospects for recovery and supportive creditors. Our principal recommendation is that ways should be found of lowering the fixed costs of CVAs to make the procedure feasible for a larger number of small firms.

Corporate rescue: empirical evidence on company voluntary arrangements and small firms

This paper focuses on the British company voluntary arrangement (CVA) which is a relatively new debtor rehabilitation process particularly intended to help financially troubled small firms resolve their difficulties. Based on a survey that is the largest and most comprehensive on the subject of British CVAs, this paper has three principal objectives: (i) to outline the characteristics of CVAs; (ii) to examine the relationships between CVA success and context; and (iii) to provide managerial and policy recommendations based on these findings. Among other things, the study finds that the overwhelming majority of CVAs are employed by small firms and that they can be particularly successful as a means of recovery when the economic fundamentals of the business are sound, regardless of the line of activity of the firm. Higher levels of success might be achieved, however, if the fixed costs of CVAs were subsidised in the case of very small firms and if more time were allowed during the process.

Governance of Distressed Firms

Contents: Preface 1. Introduction to Concepts and Dramatis Personae 2. The Relevance of Corporate Governance Theory and Related Issues 3. Governance in the Twilight Zone 4. Governance Post Formal Insolvency Regime Commencement 5. Comparative and EU Perspectives on the Governance of Distressed Firms 6. Reflections and Reform Bibliography Appendix I: Applicability of Selected Statutory Stewardship Obligations and Enforcement Thereof Appendix II: List of Selected Statements of Insolvency Practice Index

Sexual discrimination in education : one step forward, two steps back?

Discrimination against women in education is discomfortingly familiar. In 1869 the climate was such that the decision of the Court of the University of Edinburgh to pass regulations permitting the admission of women undergraduates in medicine ultimately provoked civil disorder. Sachs and Wilson vividly describe the violence of reaction thus.

Managing distressed companies: adapting to a new legal culture

Outlines UK law and practice relating to the responsibilities of directors of insolvent companies with particular reference to small firms: and explains the changes introduced by the 1985 and 1986 Insolvency Acts and the Company Directors Disqualification Act 1986. Considers the practical effects of the new law, referring to relevant cases; and stresses the psychological barriers which directors erect against facing the risk of failure and taking action to avoid it. Notes that the Insolvency Act 2000 allows directors to be disqualified without the need for costly court proceedings and makes practical suggestions on how they can protect themselves. Describes four stages of organizational crisis from denial to collapse, pointing out how managerial decision making becomes impaired in this situation and referring to relevant research. Calls for further research to “inform future legislation”.

Regulating close companies in Corporate Law : - towards a more formal recognition?

Close companies are the majority constituency in the corporate population across the globe. Yet little attempt has been made by corporate law systems explicitly to legislate for them. This is particularly so in the United Kingdom, where the courts have assumed the role of providing a customized corporate law regime for such entities. The Duomatic principle of unanimous assent, which is used to whitewash procedural irregularity, is the paradigm in this respect. This article reviews judicial attitudes in the common law world in this regard and evaluates the pros and cons of converting a globally recognized common law principle into a statutory statement of the law. It also considers the wider merits/demerits of a discrete regulatory framework for close companies and private companies in general.

Stewardship and the insolvency practitioner: a review of the current position

Where business failure occurs, it is important that a new management regime should then be installed in the form of an independent and professionally qualified insolvency practitioner, whose function as office holder will be either to achieve rehabilitation or to perform an efficient burial in accordance with the norms of distributional justice. The purpose of this short article is to highlight in this context of the discharge of stewardship responsibilities by insolvency office holders a number of governance-related issues worthy of further exploration. This is a revised and updated version of a paper delivered by Professor David Milman at the Institute of Advanced Legal Studies on November 29, 2012.

1967-1987: a transformation in company law.

The years since 1967 have indeed witnessed an unprecedented transformation of established company law principles in English law. These reforms, which have been introduced through the twin instruments of the courts and Parliament, owe much to changing political and economic conditions, major reforms of the corporation tax system, and in particular to our entry into the European Community, effective from January 1, 1973. In this survey the author invites the reader to attempt to put on one side the minute details of these changes and instead to take a panoramic overview of their broad effect. Do any discernible patterns emerge? What, if anything, have these reforms achieved in practice? In order to undertake this review the author has selected a number of key areas of the law to illustrate how things have changed in the past 20 years. The authors choice of topics may not meet with universal approval but some selectivity is essential here. This article will concern itself both with the domestic interplay within a company (eg, between directors and shareholders) and also with external relationships (such as those which exist between a company and its creditors or between creditors inter se).

The Education Act 1981 in the courts.

The Education Act 1981, which was intended to herald a new era of improved educational provision for children with special educational needs, came fully into operation on April 1, 1983.2 In the four years that have elapsed since this inauspicious commencement date a number of important cases dealing with the impact of this legislation have come before the courts. The purpose of this article is to analyse these cases and to evaluate their significance for the future operation of the new regime.