ECONOMIC ANALYSIS OF RESTITUTION CLAIMS IN BANKRUPTCY

As a legal-economic event, bankruptcy, which leads to a halt in the business life of the business people, has a direct impact on the economic interests of a whole society. One of the proceedings associated with bankruptcy involves the restitution claims by third parties against bankrupts or vice versa. The question here is how the modern approach to bankruptcy, which is based on economic theories as independent bases for restitution claims, makes a difference in the way these claims are handled compared to the traditional approach that is based on the principle of equality of creditors. It is arguable that economic theories can be solid bases for the construction and enforcement of restitution claims in bankruptcy, their advantage over the traditional approach being that the ability to reclaim property in the new approach is attuned to the goal that the merchants’ capital be returned to them as much as possible. That is why this approach takes the bankrupt’s claim against the third party as the principal form of a restitution claim, and the claim of third parties against bankrupts only as exception. The modern approach is, accordingly, conducive to the restructuring of the bankrupt’s capital and will help, by offering amenable interpretations of, and modifications to, the relevant rules, to prevent the collapse of the society’s businesses and its adverse effects.