The Deepening Insolvency Theory

Due to the importance of the Corporate bankruptcy is more importance issue in subject of bankruptcy; because several groups engage in this financial crisis. The purpose of the bankruptcy legislators is to decrease negative influences of that crisis. The economic approaches in bankruptcy proceeding is maximize the value of corporate bankruptcy estate. One of the best approaches in this case is theory of “deepening insolvency”. This theory has been described as an injury to the debtors’ corporate property from the fraudulent expansion of corporate debt and prolongation of corporate life. Some courts permitted deepening insolvency to be asserted as a theory of damages and some courts held that this theory would be recognized as a cause of action and other courts rejected that.
The legal entity of “delaying bankruptcy” is most similar to the theory of “deepening insolvency” in Iranian law. Iranian legislator not paying attention to the tort in the legal entity of “delaying bankruptcy”. Nevertheless, can be accepted that damage caused from deepening insolvency be compensated in general civil liability rules.