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Verstijlen, Frank M.J. --- "Dealing with Damages in Insolvency: The Insolvency Administrator’s Collective Claim for Damages versus Individual Claims of Creditors" [2011] ELECD 630; in Steele, Jenny; van Boom, H. Willem (eds), "Mass Justice" (Edward Elgar Publishing, 2011)

Book Title: Mass Justice

Editor(s): Steele, Jenny; van Boom, H. Willem

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781849805063

Section: Chapter 9

Section Title: Dealing with Damages in Insolvency: The Insolvency Administrator’s Collective Claim for Damages versus Individual Claims of Creditors

Author(s): Verstijlen, Frank M.J.

Number of pages: 17

Extract:

9. Dealing with damages in insolvency:
the insolvency administrator's
collective claim for damages versus
individual claims of creditors
Frank M.J. Verstijlen

1. INTRODUCTION

Insolvency law is ­ at least in part ­ aimed at distribution.1 In order to
prevent the chaos of individual creditors taking recourse against sepa-
rate assets of the debtor, insolvency law provides for a collective proce-
dure through which the proceeds of the entire estate of the debtor are
distributed among the creditors according to the order of their priority.2
Liability law is aimed at compensation of damage caused by the wrong-
ful act of an injuring party. In principle the victim is put in the position
where he would have been, had the wrongful act not taken place.
Liability law has a role to play in insolvency situations. This is the case
when the wrongful act causes damage to the creditors. Particular problems
arise when the debtor himself does not have a claim against the wrong-
doer, e.g. when he himself has initiated the wrongful act. In these cases
the insolvency administrator ­ at least in some legal systems ­ may have a
claim against the wrongdoer regarding his duty to represent the interests
of the creditors.
In these cases the distributional principles of insolvency law and liability
law may collide. When the recovered amount flows into the insolvency
estate and is distributed to the creditors according to the order of their pri-
ority, the result may be that some creditors receive more than ...