PROTECTION OF STAKEHOLDERS DURING BANKRUPTCY STATE UNDER ETHIOPIAN LAW LL.M THESIS

Abstract

During the time of bankruptcy, protecting interests of the bankruptcy stake holders is one of the purposes of the general bankruptcy laws. Under this study, protecting interests of legitimate creditors from the acts of deceitful bankrupt debtors after and before the declaration of the debtors’ bankruptcy declaration is studied. To this effect, trustees have crucial role to protect interests of the stake holders during the time of bankruptcy which enables them to avoid fraudulent transactions and unlawful preferences made by the bankrupt debtor. However, the extent of power vested to the bankruptcy trustees under Ethiopian bankruptcy law is found to be with less stretched time compared to the US bankruptcy trustees. Unlike the Ethiopian regime, the US regime of insolvency empowers trustees with two optional look back periods to trustees enabling them to avoid those transactions and preferences that could not be avoided with in two year look back period. It is also argued in the study that the reason behind the strong power of trustees in US is the institutional and legal frameworks by which trustees are governed. Finally, it is concluded that Ethiopian insolvency regime lacks strong trustees office and a legal ways to make the trustees powerful to claim avoidance of long time defrauded transactions and unlawful preferences compared to the US.