Booms need Busts: Improving the legal framework for Insolvency

Date Published: 
September, 2012
Document Author(s): 
CaPRI
Thematic Area: 

The Jamaican Banking crisis in the late 1990’s represented a period of unprecedented corporate failure. The experience provided lessons for regulators and policy-makers on the short-comings of both the financial regulatory environment and corporate insolvency laws, which inhibited the redeployment of productive resources in other sectors. This briefing provides an overview of the insolvency regime in Jamaica and a proposal for corporate rescue and rehabilitation reforms based on best practices for insolvency, bankruptcy, receivership and administration in the Caribbean, U.K., Canada and the U.S.A. A reform will not save all failing entities within a crisis, however the recommendations will provide greater certainty to identify occurrences and determine whether rescue or rehabilitation options are available to financially distressed companies.