Sectoral Insolvency Frameworks: Why Certain Sectors Require Tailored Approaches

BRRD, IRRD, special administration regimes, suppliers of last resort, U.S. railroad reorganizations, extraordinary administration procedures,… These are all examples of sectoral insolvency frameworks. While most insolvency scholars are familiar with the bank resolution framework, many of the other frameworks remain largely unknown, despite their growing impact on national insolvency systems. They frequently give rise to political tension, diverge from ordinary insolvency principles, and introduce complexity. At the same time, they can be essential in moments of systemic crisis, offering a structured response where general insolvency law may fall short. Cases such as Banco Popular, Agrokor, Bulb, and Vlaamse Energieleverancier illustrate the role sector-specific rules can play in practice. However, fundamental questions remain: Are sectoral insolvency frameworks genuinely necessary? If so, which sectors require a tailored approach? What elements should such frameworks contain, and what can remain within the scope of ordinary insolvency law? Should these frameworks operate as standalone regimes or as integrated chapters within existing laws? Currently, my research focuses on a comparative and descriptive analysis of existing sectoral insolvency regimes, grouped under four (provisional) categories: banks, insurers, utilities, and large employers. The analysis considers context, content, objectives, interaction with ordinary insolvency law, and real-world application. This mapping exercise reveals recurring challenges and design choices in existing regimes, which would form the basis of my presentation at the YANIL workshop. Future stages of the research aim to identify the determinants that justify sector-specific rules (such as systemic risk, provision of essential services, and/or public interest concerns) and to develop an assessment framework for evaluating when and how such tailored insolvency approaches are warranted. This framework will then be applied to the sectors already examined to assess what kind of insolvency rules or exceptions might be appropriate in light of their characteristics.