Apples and oranges? Corporate rescue and functional convergence in the US and UK

This paper challenges the standard characterisation that US law in the sphere of corporate bankruptcy is ‘pro debtor’ and UK law is ‘pro creditor’. It suggests that the traditional thesis is, at best, a potentially misleading over‐simplification. It also offers the conclusion that there is functional convergence in practice, while acknowledging that corporate rescue, as distinct from business rescue, still plays a larger role in the US. The functional convergence has partly come through the UK Enterprise Act 2002 but the paper suggests that the main move has been that of US law and practice in a UK direction with more emphasis on business disposals and speedier cases than on corporate reorganisations, as traditionally understood. This mirrors practice in the UK where the emphasis has always been on business disposals. Unfortunately, the current economic recession on both sides of the Atlantic has shone a heightened spotlight on business bankruptcy and is likely to generate further changes in practice and ultimately legislation.