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Restructuring of businesses [PhD]

In her PhD project Marie Meling's discusses whether the use of contracts in the restructuring process of companies is acceptable, or if there should be more use of specific regulations with its rights and obligations.

Photo: Colourbox

About the project

The combination of global market changes, over-contracting and a significant drop in the oil price and thereby increased focus on reducing oil companies’ costs has led to the need for owners, lenders and other parties within the Norwegian shipping- and oil service market to “restructure” their business. In this context, the term “restructuring” is used as a description for the changing of the composition, conditions and/or ownership structure of assets and liabilities of a debtor, when the debtor is in an unusually challenging financial situation. As the main focus of these processes will be to improve the company’s balance sheet through reduction of financial liabilities, the term “financial restructuring” is also used. The purpose of such a restructuring will be to enable the continuation, in whole or in part, of the debtor’s activities. The project will be based on an analysis of the many ongoing restructurings in the shipping- and offshore sector in Norway.

In Norway, the restructurings of companies or groups of companies are usually done as out-of-court-restructurings or, if we use the World Bank’s expression, “in the shadow of the law”. The Norwegian Bankruptcy Code (Nw. konkursloven) of 1984 does not provide the required flexibility for a restructuring to succeed. Company groups within the shipping- and offshore sector are usually also having assets and activities outside of Norway, and the lack of legal tools to deal with this international aspect in a proper manner further complicates many of the restructurings. The message, both in the preparatory documents, in the later revision rounds for the Bankruptcy Code and in the many (non-binding) international guidelines applicable to restructurings, is, however, that more restructurings should be brought “out of the shadow” and “into the light of the law”.

The main research question for my project is how changes to the current regulation in the Bankruptcy Code and other relevant legislation can foster such a development in Norway. At the same time, the project will analyse whether such a shift from purely consensus based solutions to more court led and forced solutions will actually be beneficial to the involved stakeholders. The project thus has a clear connection to legislative politics.

The project thesis will firstly discuss the appropriate scope for the rules, i.e. when a company should qualify for a court led restructuring. Once the scope of the rules has been clarified, the project will focus on questions related to (i) parties to and legal consequences of the restructuring process; and (ii) the restructuring plan and its legal implications. When discussing these issues, I expect that it will be relevant to look further into the need for changes in other legislation with impact on a company’s or its stakeholders rights and obligations. This includes a discussion of company law, mortgagee’s rights and methods of valuation. In addition, it will be relevant to discuss the business specific regulations applicable to banks and other stakeholders. These regulations will probably – and maybe even to a larger extent than the rules found in the Bankruptcy Code – be decisive for the regulated parties’ ability to accept certain restructuring terms.

When working on the thesis, I intend to follow the international debate and development of (new) rules in foreign and international law, especially within the EU. Comparative analysis may provide perspective and useful input, both when it comes to balancing and understanding the (often conflicting) interests involved and as practical examples for future Norwegian legislation. The legal and political evaluation of the rules should preferably include cost-benefit analysis. It might therefore be useful to make use of economic theory (economic analysis of law) in order to reach the project’s goals.


The project is expected to be concluded in 2020, with the submission of the PhD thesis.

Tags: restructuring, companies, bankruptcy, international law
Published Sep. 20, 2017 3:31 PM - Last modified Jan. 22, 2018 4:13 PM


Phd Candidate

Marie Meling


Professor Kåre Lilleholt