Corporate Insolvency in Transition: Reconciling Rescue Objectives with Creditor Protection and Regulatory Change

Abstract

This article critically reconceptualises corporate insolvency law by examining the evolving interplay between rescue culture, creditor rights, and regulatory transformation. Traditionally rooted in liquidation-oriented frameworks, insolvency regimes have progressively shifted toward a rescue paradigm aimed at preserving economically viable firms. However, this transition raises fundamental questions regarding the balance of power between debtors and creditors, particularly in jurisdictions where creditor-centric mechanisms dominate restructuring processes. The study analyses whether the proclaimed “rescue culture” genuinely facilitates corporate rehabilitation or merely operates within a creditor-driven architecture that prioritises recovery over revival. Adopting a doctrinal and analytical approach, the article evaluates key legislative and institutional reforms that have reshaped insolvency governance, with particular attention to the implications of regulatory transformation in modern economies. It argues that while contemporary frameworks promote efficiency, transparency, and time-bound resolution, they often marginalise broader stakeholder interests, including employees and minority claimants. The paper further contends that the dominance of financial creditors risks undermining the normative objectives of insolvency law as a tool for economic stabilization and business continuity. The article concludes by proposing a recalibrated framework that integrates rescue-oriented principles with equitable creditor protections, advocating for a balanced and context-sensitive insolvency regime.