The main objective of this master’s thesis is to examine whether the new bankruptcy quarantine regulation introduced into the Danish legal system, has removed the incentive to commit bankruptcy fraud in Denmark. ! Bankruptcy fraud and exploitation of the rules concerning a company with limited liability has been a serious problem in Denmark for several years. Consequently, this has cost Danish society billions of Danish kroner every year. On the 15th of January 2009, the Bankruptcy Council was given the assignment to find a solution to the problem. This subsequently resulted in parliamentary report no. 1525 from 2011. Based on this report, the Danish Parliament adopted, bill no. 429 “Lov om ændring af konkursloven, retsplejeloven og retsafgiftsloven (konkurskarantæne)”!on 1st of May 2013. In effect, this bill should work as a counteraction to the problem with bankruptcy fraud in Denmark. ! The following investigates why there exists an incentive - theoretically speaking - to commit bankruptcy fraud. With the use of neoclassical economic theory, it is outlined why the Danish society suffered an economic loss due to bankruptcy fraud prior to the new bankruptcy regulation. The neoclassical theory is combined with the principal-agent theory to examine how it will be achievable for the Danish Parliament to strategize solutions, which could reduce the economic loss caused by bankruptcy fraud. In closely studying how to achieve an ideal treatment of insolvencies, the principal-agent model is used analogically to establish the nature of the problem as well as how an ideal model without bankruptcy fraud is achieved. ! Furthermore, the current bankruptcy quarantine regulation is analysed to examine what elements must be in place for the Courts of Denmark to impose bankruptcy quarantine on a person holding a company with limited liability. The legal analysis will also include legal practice in order to examine how the Courts of Denmark interpret the legislation in force, and the term grossly irresponsible business conduct. The main findings from the economic and legal analysis will be integrated in an interdisciplinary perspective. In this perspective, the economic situation prior to the new regulation is used as a base case in order to clarify whether the new regulation, in theory, has removed the incentive to commit bankruptcy crime in Denmark. Conclusively, an efficiency analysis is carried out based on the regulation introduced into Danish law. This is to ultimately determine whether the Danish Parliament has managed to successfully impose an efficient regulation concerning bankruptcy fraud in Denmark.
|Educations||MSc in Commercial Law, (Graduate Programme) Final Thesis|
|Number of pages||177|