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The Imposed Bargain in Contemporary Restructuring Law: 3CL Seminar
Speaker: Dr Luca Sicignano (Lecturer in Business Law at the University of Naples L’Orientale)
Abstract: The effectiveness of corporate restructuring plans largely relies on solutions shared as widely as possible among relevant stakeholders. This explains the worldwide spread of procedures that presuppose a negotiation phase and the attainment of genuine agreements among all stakeholders involved, or at least among the majority of them. However, following Directive (EU) 2019/1023, the widespread introduction of cross-class cram-down mechanisms and more flexible value-allocation rules (the Relative Priority Rule), has profoundly altered the incentives that structure these negotiations. Through a comparative analysis of the main European systems, the paper shows that these tools - originally conceived to prevent opportunistic holdouts - often weaken the search for genuinely consensual solutions and encourage the formation of narrow negotiating coalitions that ultimately impose their preferred outcomes on dissenting creditors. This paper seeks to highlight the modern paradox (the so-called “imposed bargain”) represented by the spread of imposed plans and to investigate the motivations that are likely driving the growing reliance on non-consensual tools for resolving corporate distress.
Luca Sicignano is a Postdoctoral Research Fellow in Business Law at the University of Campania “Luigi Vanvitelli” and a Lecturer in Business Law at the University of Naples “L’Orientale”. He graduated from Luiss “Guido Carli” University in Rome in 2017, where he currently serves as a Teaching Assistant. In 2022, he obtained a Ph.D. in Business Law and was admitted to the Italian Bar following a judicial clerkship at the Public Prosecutor's Office of the Court of Appeal of Rome. He has held visiting research positions at the University of Cambridge, the University of Vienna, and the Max Planck Institute Luxembourg, and has undertaken repeated research stays at the Institute for Comparative Law of Heidelberg University. During the academic year 2023–2024, he served as a Lecturer at Heidelberg University, teaching Introduction to Italian Company Law. His research focuses on Business Law, with particular emphasis on corporate, financial and insolvency law. He has authored over 25 publications in Italian and international journals and has presented his research at conferences in Dublin and Dubrovnik. He serves on the editorial board of Banca, Borsa e Titoli di Credito and is a member of the European Law Institute (ELI) and the Young Scholars section of the European Society for Banking and Financial Law (AEDBF).
3CL runs the 3CL Travers Smith Lunchtime Seminar Series, featuring leading academics from the Faculty, and high-profile practitioners.
For more information see the Centre for Corporate and Commercial Law website:
http://www.3cl.law.cam.ac.uk/
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By Faculty of Law, University of CambridgeSpeaker: Dr Luca Sicignano (Lecturer in Business Law at the University of Naples L’Orientale)
Abstract: The effectiveness of corporate restructuring plans largely relies on solutions shared as widely as possible among relevant stakeholders. This explains the worldwide spread of procedures that presuppose a negotiation phase and the attainment of genuine agreements among all stakeholders involved, or at least among the majority of them. However, following Directive (EU) 2019/1023, the widespread introduction of cross-class cram-down mechanisms and more flexible value-allocation rules (the Relative Priority Rule), has profoundly altered the incentives that structure these negotiations. Through a comparative analysis of the main European systems, the paper shows that these tools - originally conceived to prevent opportunistic holdouts - often weaken the search for genuinely consensual solutions and encourage the formation of narrow negotiating coalitions that ultimately impose their preferred outcomes on dissenting creditors. This paper seeks to highlight the modern paradox (the so-called “imposed bargain”) represented by the spread of imposed plans and to investigate the motivations that are likely driving the growing reliance on non-consensual tools for resolving corporate distress.
Luca Sicignano is a Postdoctoral Research Fellow in Business Law at the University of Campania “Luigi Vanvitelli” and a Lecturer in Business Law at the University of Naples “L’Orientale”. He graduated from Luiss “Guido Carli” University in Rome in 2017, where he currently serves as a Teaching Assistant. In 2022, he obtained a Ph.D. in Business Law and was admitted to the Italian Bar following a judicial clerkship at the Public Prosecutor's Office of the Court of Appeal of Rome. He has held visiting research positions at the University of Cambridge, the University of Vienna, and the Max Planck Institute Luxembourg, and has undertaken repeated research stays at the Institute for Comparative Law of Heidelberg University. During the academic year 2023–2024, he served as a Lecturer at Heidelberg University, teaching Introduction to Italian Company Law. His research focuses on Business Law, with particular emphasis on corporate, financial and insolvency law. He has authored over 25 publications in Italian and international journals and has presented his research at conferences in Dublin and Dubrovnik. He serves on the editorial board of Banca, Borsa e Titoli di Credito and is a member of the European Law Institute (ELI) and the Young Scholars section of the European Society for Banking and Financial Law (AEDBF).
3CL runs the 3CL Travers Smith Lunchtime Seminar Series, featuring leading academics from the Faculty, and high-profile practitioners.
For more information see the Centre for Corporate and Commercial Law website:
http://www.3cl.law.cam.ac.uk/