Panel:“ Who Holds the Cards? Examining the Evolving Role of Shareholder Interests in Bankruptcy”
Summary by Midori Yamaguchi – NextGen Class XIII
The panel“ Who Holds the Cards? Examining the Evolving Role of Shareholder Interests in Bankruptcy” was moderated by Professor Anthony Casey and featured Cristina Okike( United States), Florian Bruder( Germany), Christopher Howard( United Kingdom), and Thiago Braga Junqueira( Brazil). The discussion explored the extent to which shareholders, particularly private equity sponsors, influence restructuring and insolvency outcomes across different jurisdictions, focusing on shareholder influence before a filing, during a restructuring process, and at the plan confirmation stage.
The central theme of the discussion was whether restructuring practice has shifted from traditional lender control toward greater sponsor and shareholder influence. While the answer varied significantly by jurisdiction, the panel demonstrated that shareholders often retain substantial leverage in the period leading up to a restructuring, even where creditors ultimately control economic outcomes.
The discussion began with the pre-filing stage. In the United States, sponsors frequently exert significant influence through their control of the board of directors, which determines whether and when a company files for bankruptcy. The flexibility afforded by the business judgment rule, together with the increasing use of liability management exercises, allows distressed companies to pursue a wide range of restructuring alternatives before resorting to
Chapter 11. By contrast, German law imposes strict filing obligations once insolvency triggers are met, significantly limiting a shareholder’ s ability to delay proceedings. The United Kingdom occupies a middle ground, where directors’ duties increasingly require consideration of creditor interests as insolvency approaches, although practical constraints on sponsors remain less severe than in Germany. Brazil was described as one of the more shareholder-friendly jurisdictions, where shareholders continue to exercise substantial influence over whether and when a judicial reorganization proceeding is commenced.
The panel also examined forum shopping and venue selection in cross-border restructurings. In the United States, the United Kingdom, and Germany, large multinational restructurings increasingly involve consideration of multiple jurisdictions, with stakeholders evaluating which forum is best suited to achieve a particular restructuring objective. The discussion highlighted how differences in restructuring tools and shareholder treatment can influence forum selection. In contrast, Brazil’ s venue rules are tied closely to the debtor’ s principal place of business, leaving comparatively less flexibility for international forum shopping.
The panel then turned to governance during the restructuring process. In the United States and the United Kingdom, the increasing use of independent directors and restructuring professionals reflects efforts to address conflicts of interest and strengthen oversight in distressed situations. In the United States, independent directors are often appointed to special committees responsible for evaluating
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