This article deals with the common law institutions on the grounds for challenging transactions made to the detriment of creditor’s property interests, and the relevant legal provisions and presumptions located in Chapter III.1 of the Russian law on insolvency (bankruptcy), a comparative legal analysis of the object and grounds of the challenge, the subjects of the challenge, the composition for proving the fact of fraudulent transfer of the debtor’s property and the preferred satisfaction of the creditor’s claims is carried out.
Abstract
We examine entrepreneurial activity following the staggered adoption of modern-day fraudulent transfer laws in the United States. These laws strengthen unsecured creditors’ rights and are particularly important for entrepreneurs whose personal assets commingle with the firm’s. Using administrative data from the U.S. Census Bureau, we document declines in startup entry—particularly among riskier entrants—and closures of existing firms after these laws pass. Firm financial data shows that entrepreneurs lower leverage by reducing demand for unsecured credit. Our results suggest that strong creditor protections can limit entrepreneurs’ appetite for risk, which may reduce churning along the extensive margin among the smallest firms in the economy.
Challenging of Debtor`s Transactions Aimed at Infliction of Damage on Creditors in Anglo-American Law and Russian Civil Law: Comparative Law Research
