Insolvency and the Corporate Debtor: Some Legal Aspects of Creditors Rights Under Corporate Insolvency in Zimbabwe
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A debtor who is unable to pay his debts triggers the pursuit of a variety of remedies by his creditors. However, the law has, since historic times, refused to give creditors an unbridled avenue to the debtors' person or assets in satisfaction of their claims. An important issue in every legal system is the determination of whether a creditor's rights are adequately protected vis-a-vis a debtor who is unable to pay his debts. Almost always, the issue resolves itself into an examination of the insolvency laws of the legal system. This is so because a creditor, notwithstanding having obtained judgement against the debtor, finds himself in competition with others over the debtor's meager assets. Thus an insolvency proceeding provides an easy way out as it replaces "the free-for-all" attendant upon the pursuit of individual claims by different creditors with a statutory regime in which creditors' rights and remedies are suspended, wholly or in part, and a mechanism is provided for the orderly collection and realization of assets and the rateable distribution of dividends among creditors' claims.