BASIS FOR A CONTRACTUAL APPROACH TO INSOLVENCY LAW

The “contractual approach of Insolvency Law” is a misconception. Not only does it give the idea that there is a perspective that exclusively caters private interests, but also that it strips the authority of any form of control. In this sense, we believe that such concept shall be redirected to understand that it implies a new hierarchy of the implicit interests faced to the phenomenon of insolvency, placing the emphasis in its distributive function (subordinating to it all the other objectives of Insolvency Law) and noting that the stakeholders themselves (mainly, the creditors) shall be able to negotiate a more efficient result, measured on the basis of maximizing their chances of recovery. Hence, Insolvency Law should be resized in order to create structures for the coordination of the credits (which shall be the only mandatory rules due to their structural nature) and to encourage agreements, as a paradigm of party autonomy, through lower transaction costs and the treatment of information asymmetries.