Sarah Paterson

Administrative support: Stephen Jenner
Room: New Academic Building 6.06
Tel. 020-7106-1244

Sarah Paterson is an assistant professor of corporate insolvency. Before joining LSE she was a partner in Slaughter and May in London, with whom she retains a consultancy.



Research Interests
  • Corporate recovery and insolvency

  • Trusts

External Activities
  • Consultant to Slaughter and May

  • Member of the Insolvency Lawyers’ Association

  • Member of the Technical Committee of the Insolvency Lawyers’ Association

  • Member of the Association of Business Recovery Professionals


Butterworths Encyclopaedia of Banking Law (Butterworths Law, 1996-); contributing editor, Division F2

Debt restructuring (Oxford University Press, 2011) (with Rodrigo Olivares-Caminal, John Douglas, Randall Guynn, Alan Kornberg, Dalvinder Singh, and Hilary Stonefrost)

Selected articles
and chapters in books

The Paradox of Alignment: Agency Problems and Debt Restructuring' European Business Organisation Review [FORTHCOMING]

(with Hugh Beale and Louise Gulifer) 'A Case for Interfering with Freedom of Contract? An Empirically-Informed Study of Bans on Assignment' Journal of Business Law  (2016( 3) pp.203-230

Considers, using two empirical studies, whether contractual clauses banning suppliers from assigning receivables arising under contracts are an unjustified interference with freedom of contract and should be banned. Reviews the background to the studies, UK law's approach to the legal effect of bans on assignment and the policy of the finance market. Details the main findings of the studies and how other jurisdictions have addressed the issue.

'Rethinking Corporate Bankruptcy Theory in the Twenty-First Century' Oxford Journal of Legal Studies (2015) pp.1-27

Adopting a comparative UK/US approach, this article argues for the need to rethink corporate bankruptcy theory in the light of developments in the finance market. It argues that these developments have produced an effective mechanism, in large cases, for selecting between companies which will be worth more if they continue to trade and companies which ought to be allowed to fail, so that corporate bankruptcy law need no longer concern itself with steering creditor choice away from a sale of the business and assets and towards a restructuring. Moreover, it suggests that whilst the automatic stay remains a central tenet of corporate bankruptcy law where the market decides that the business and assets should be sold, in cases where the market sees more value if a company continues to trade, corporate bankruptcy law may operate very well without a stay as a resolution procedure for deadlocked negotiations. The article identifies that in many large restructuring cases the only liabilities that are implicated are financial liabilities, and queries the extent to which the distributional concerns of the progressive movement, and US federal bankruptcy law, apply where losses are shared amongst sophisticated financial institutions. It ends with an explanation of why the analysis is limited to large cases, an indication of areas for further research and a note of caution for the future.

(with Hugh Beale and Louise Gulifer) 'Ban on assignment clauses: views from the coalface' Butterworths Journal of International Banking & Financial Law (2015) 30 (8) pp.463-466

Summarises the findings of two qualitative studies assessing the effect of ban on assignment (BoA) clauses in trade receivables financing. Reviews the law applicable to the assignment of receivables to a financier, noting uncertainty over the effect of a BoA clause. Considers whether BoAs in supply contracts adversely affect the availability of finance to small businesses and result in the use of workarounds, thereby increasing the cost of finance.

'The adaptive capacity of markets and convergence in law: UK high yield issuers, US investors and insolvency law'  Modern Law Review  2015, 78 (3), 431-460.

Provides an overview of theories on the relationship between law and equity capital markets. Traces the history of the development of the UK high yield securities market and English insolvency law, noting the ways financial markets adapt to the legal environment and the pressures the markets exert on the legal system. Assesses the prospects of convergence between the US and UK approaches to valuation in cases of default by companies in financial distress.

'Rethinking the Role of the Law of Corporate Distress in the Twenty-First Century' Law Society and Economy Working Paper Series, WPS 27-2014 December 2014

Thomas Jackson famously described the role of all bankruptcy law as reducing the incentive for individual enforcement against the assets of a distressed company. Although scholars have debated other aspects of Jackson's thesis, most have continued to identify with this as the central tenet of bankruptcy law. This paper proposes a new taxonomy: the law of corporate distress comprised of insolvency law and restructuring law. It argues that Thomas Jackson's description remains apt for part of that taxonomy but draws a distinction between the constituent parts. It reframes the unifying aim of the law of corporate distress as the facilitation of the reallocation of resource in the economy to best use and draws a distinction between insolvency law's role in reducing the incentive for individual enforcement and restructuring law's role in providing a deadlock resolution procedure. Adopting a comparative Anglo-American approach it examines the implications of this distinction for insolvency law and restructuring law in the twenty-first century.

'Bargaining in Financial Restructuring: Market Norms, Legal Rights and Regulatory Standards' Journal of Corporate Law Studies 14 (2) (2014) pp.333-366

In the 1990s large financial restructurings were typically negotiated by reference to the market conventions of the day, reflected in a set of principles known as the London Approach. Commentary on the London Approach at the start of the last decade sounded a note of caution for its survival in rapidly changing credit markets. This article is about what happened as parties moved away from negotiating by reference to market norms towards negotiating by reference to their strict legal rights. It considers the difficulties which have arisen and whether these are best tackled by law and the courts or by the market and regulation.

‘Lodging a Proof of Debt and Submission to Jurisdiction’ (2013) Corporate Rescue and Insolvency 6.3

‘COMI: The Elephant in the Room’ (2012) Corporate Rescue and Insolvency 5.4

‘Charter Communications: A Charter for Others?’ (2010) Corporate Rescue and Insolvency 3.4

‘LyondellBasell: The Longer Arm of Chapter 11’ (2009) Corporate Rescue and Insolvency 2.4