ABSTRACT
What is rationality and what role does it play in the bargaining in which parties engage as part of a restructuring? Is the outcome of rational bargaining fair? And, incidentally, what does ‘fair’ mean? How does reasonableness differ from rationality, and what is its role in restructuring negotiations? What conceptions of rationality and of reasonableness are enshrined in the restructuring jurisprudence? What does ‘the market’ know? What about the quasi-omniscient market that features in certain forms of the ‘Efficient Markets Hypothesis’? Is there any relevant sense in which ‘the market’ is reasonable, and if so, how do GameStop and Melvin Capital fit in? This paper addresses all these questions in the context of the court’s cramdown power pursuant to Part 26A of the Companies Act 2006 and in assessing two important papers by Professor Sarah Paterson. The concluding section provides a detailed summary of the arguments.
Mokal, Riz, The ‘Too Much Unfair Value’ Approach to the UK Cramdown (October 20, 2024).
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