Question

Laws regulating corporate reorganization in bankruptcy are more liberal from the corporate debtor’s perspective in the United States than in Europe and Canada.

True

False

Answer 1

False. Laws regulating corporate reorganization in bankruptcy are generally more favorable towards corporate debtors in Europe and Canada compared to the United States. The statement is false.

Step-by-step explanation:

The statement is false. Laws regulating corporate reorganization in bankruptcy are generally more favorable towards corporate debtors in Europe and Canada compared to the United States.

In Europe, the focus is often on rehabilitating and saving the company as a going concern. Many European countries have laws and regulations that prioritize the interests of creditors, shareholders, and other stakeholders in restructuring efforts, and offer options like debt restructuring, debt-to-equity swaps, and pre-insolvency procedures.

In Canada, the Companies' Creditors Arrangement Act (CCAA) provides a framework for restructuring struggling companies. The CCAA allows a company to continue operating while it develops and implements a plan to reorganize its business, repay its debts, and emerge from bankruptcy.