Annotation

Procedural consolidation involves conducting a single bankruptcy case against a business group with the appointment of a single insolvency administrator. When a single insolvency administrator exercises the powers of an insolvency administrator for each entity within a single business group under procedural consolidation, a high probability of conflicts of interest and duties arises. If there are contentious legal relationships between entities within a single group, the single insolvency administrator is obligated to protect the rights and interests of both debtors. Independent, out-of-court resolution of contentious legal relationships by a single insolvency administrator limits the rights of creditors and other interested parties to oversee the insolvency administrator's activities and creates the risk of reducing the bankruptcy estate. Since the will of both entities within a single business group is formed and expressed by a single person, traditional litigation between such entities would be contrary to the adversarial principle. In the article, the author analyzes these conflicts and proposes a special procedure based on the provisions on documentary proceedings, in which isolated disputes are considered by a judge alone without holding a court hearing or summoning persons involved in the case