In my new monograph, Corporate Reorganization Law and Forces of Change (OUP 2020), I argue that it is not possible to adopt a fixed or universal conceptual framework in analysing the many different types of corporate reorganization case for large firms which have emerged in the twenty-first century. Using a comparative approach, I explore the significance of this claim for scholars, practitioners, judges, and the legislature when they analyse the content or case for reform of corporate reorganization law in the US and England.
It is widely acknowledged that the economic versus progressive debate in the US was shaped by conditions in the financial and non-financial corporate fields when the debate emerged in the 1980s. Yet, notwithstanding the fact that almost every aspect of this landscape has changed, US corporate reorganization law scholarship often appears stubbornly wedded to a set of concepts which, I argue, are historically contingent. In the book I identify six ‘forces of change’ in the fields proximate to corporate reorganization. I argue that these forces have changed the nature of the problem which law is called on to solve. I show that, as a result, participants in the process have mobilized and adapted corporate reorganization law in new and diverse ways. Thus, multiple types of corporate reorganization case emerge so that there is no such thing as the typical corporate reorganization case in the twenty-first century.
With this insight in hand, I argue that applying historically contingent concepts to each of the different adaptations leads to serious wrong turns, whichever theoretical lens is used to view corporate reorganization law. Instead, I suggest a return to basics. First, scholars must start with the dominant theoretical concern with which they identify. Secondly, they must analyse how that theoretical concern manifests itself in the specific adaptation which is under review. And, finally, they must adapt their conceptual framework accordingly.
I argue that, when this route map is followed, some intellectual convergence should emerge between economically minded and progressively minded US corporate reorganization law scholars in analysing some types of corporate reorganization law case. But the book is emphatically not a declaration of the end of the economic versus progressive debate. Indeed, I seek to show that the distance between the two camps is as wide as ever in other types of case. I call for a redrawing of the contours of the debate, rather than the end of the debate.
So far so good, but what of the comparative aspect of the book? My argument here is that, because corporate reorganization was predominantly an out-of-court affair in England right up to the 2000s, when participants in this jurisdiction turned to corporate reorganization law and to the courts, they were not bounded by concepts which had developed at a different time. In England, large corporate reorganizations limited to loan, bond and equity finance arrangements have dominated practice in the last decade; scholars, practitioners and the courts have developed a conceptual framework which, I argue, is well-adapted for reviewing this type of case. Yet, I caution, the landscape is dynamic and there are reasons to suggest it is shifting again. Thus, my claim is that the challenge for English scholars, judges, practitioners and the legislature lies ahead: will they adapt a well-developed conceptual framework if corporate reorganization law is mobilized and adapted in new ways by participants in the process in this jurisdiction in the decade to come? In both the US and England, the time for a fixed or universal conceptual framework for analysing the whole of corporate reorganization law has passed, whatever theoretical or policy concerns underpin the endeavour.
Sarah Paterson is an associate professor of law at the London School of Economics.