The Power Gap: Pre-Commencement Authority of Insolvency Administrators and the Limits of Judicial Gatekeeping

Abstract

Modern insolvency law faces a critical “power gap” between a petition’s filing and the formal opening of proceedings, a period exposing the debtor's assets to severe dissipation risks. Existing scholarship lacks a comparative, normative criterion to determine when an insolvency administrator should hold pre-commencement authority. This article bridges that gap by synthesizing bankruptcy theory to weigh the expected cost of delay against the cost of foregone monitoring. Testing this standard against two opposing institutional poles—the United States, which withholds early authority, and Germany, which grants it extensively—reveals symmetrical structural failures when these models are applied without matching accountability infrastructures. To resolve this, the article proposes a graduated institutional design that conditions an administrator’s early powers on a jurisdiction’s actual monitoring capacity. Applying this model to evaluating specific case of Vietnam’s Bankruptcy Recovery Law 2025, the study demonstrates how mandatory professional liability and interim creditors' committees can safeguard assets without overburdening resource-constrained judiciaries.