In the recession of the early 1990s, banks and other secured lenders were criticised for being too quick to call in their debts and exercising too much control and influence over companies through the enforcement of their security.
When the president of the Board of Trade, Peter Mandelson, visited the US he was so impressed with the American debtor-friendly approach to insolvency that he set in motion a major review of UK insolvency legislation, which broadly takes a lead from the American model, albeit with significant differences, not least the absence of the level of continuing managerial control in US Chapter 11 bankruptcy.
