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US exceptionalism and UK localism? Cross-border insolvency law in comparative perspective

  • Gerard McCormack (a1)
Abstract

This paper addresses how the UNCITRAL Model Law on Cross-Border Insolvency has been implemented and interpreted in the US and the UK. The Model Law has attained a measure of international acceptance and is intended to achieve greater efficiencies in the administration of insolvency cases with transnational dimensions. But different manners of implementation in different countries and differing interpretations may hinder the prospects for harmonisation and coordination of laws. The paper will address in particular whether US interpretations differ from those in the UK and whether the US decisions are so infused with ‘American exceptionalism’ that they cannot be relied upon as sure guides in other countries.

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Corresponding author
Gerard McCormack, Centre for Business Law and Practice, School of Law, University of Leeds, The LibertyBuilding, University of Leeds, Leeds LS2 9JT, UK. Email: g.mccormack@leeds.ac.uk
References
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1. The Model Law (1997) is available at the United Nations Commission on International Trade Law (UNCITRAL) website: http://www.uncitral.org/. For analyses of the Model Law by those involved in its drafting, see: Berends, AUNCITRAL Model Law on Cross-Border Insolvency: a comprehensive overview’ (1998) 6 Tul J Int'l & Comp L 309; Clift, JThe UNCITRAL Model Law on Cross-Border Insolvency: a legislative framework to facilitate coordination and cooperation’ (2004) 12 Tul J Int'l & Comp L 307.

2. But for a somewhat different view, see Chandra Mohan, SCross-border insolvency problems: is the UNCITRAL Model Law the answer?’ (2012) 21 Int'l Insolv Rev 199, who suggests that the belief that the adoption by the US and UK ‘might encourage adoption by a wider circle of countries’ has simply not materialised. For the current list of adoptions, see the UNCITRAL website: http://www.uncitral.org/.

3. See Chapter 47 of the Statutes of Canada, 2005, introducing new provisions into the Bankruptcy and Insolvency Act (BIA) and the Companies’ Creditors Arrangement Act (CCAA). For a general discussion, see Sarra, JNorthern lights, Canada's version of the UNCITRAL Model Law on Cross-Border Insolvency’ (2007) 16 Int'l Insolv Rev 19.

4. Cross-Border Insolvency Act 2008; on which, see Mason, RCross-border insolvency and legal transnationalisation’ (2012) 21 Int'l Insolv Rev 105; Hargovan, A ‘ The Cross-Border Insolvency Act 2008 (Cth) – issues and implications’ (2008) 22 Australian J Corp L 188.

5. See HR Rep No 31, 109th Congress 1st Session, at paras 106, 107, 109.

6. Ibid, at para 109.

7. SI 2006/1030. Regulation 2 provides that ‘(1) The UNCITRAL Model Law shall have the force of law in Great Britain in the form set out in Sch 1 to these Regulations (which contains the UNCITRAL Model Law with certain modifications to adapt it for application in Great Britain)’.

8. See the strictures uttered by J Scalia in the US Supreme Court in Roper v Simmons (2005) 543 US 551 about the use of foreign law and American exceptionalism,

9. In this paper, the expressions ‘bankruptcy’ and ‘insolvency’ are used interchangeably.

10. See generally Mevorach, IOn the road to universalism: a comparative and empirical study of the UNCITRAL Model Law on Cross-Border Insolvency’ (2011) 12 Eur Bus Org L Rev 517.

11. See Model Law, Arts 2(g) and (h).

12. Article 20.

13. Article 21

14. There are also liquidation and business rescue or restructuring provisions (referred to as ‘administration’) in the UK Insolvency Act, but note a potentially significant difference in wording between the implementation of the Model Law in the US and the UK. Under s 101(23) of the US Bankruptcy Code, ‘foreign proceedings’ covers proceedings in a foreign country ‘under a law relating to insolvency or adjustment of debt’, whereas in the UK the Cross-Border Insolvency Regulations 2006, SI 2006/1030, Sch 1, reg 2(i) does not specifically define foreign proceedings to include proceedings for the adjustment of debts.

15. Regulation 1346/2000. The Regulation is presently being ‘recast’ by the European authorities, but the recast does not affect the substance of the points under discussion. For the text of the ‘recast’, see 16636/14 MN/FC/ra DGD 2 of 26 February 2015.

16. See s 1520(c) Bankruptcy Code in the US and Cross-Border Insolvency Regulations 2006, SI 2006/1030 Sch 1, Art 20(5) in the UK.

17. See, however, Franken, SComparative insolvency law: a comparative institutional analysis’ (2014) 34 Oxford J Legal Stud 97 at 104, who argues the Model Law embodies an approach of ‘cooperative territorialism’, but she does not address any analysis or judicial pronouncements to the contrary.

18. It also refers to facilitating the rescue of financially troubled businesses, thereby protecting investment and preserving employment. For discussion of the wider goals of insolvency law, see Warren, EBankruptcy policy’ (1987) 54 U Chicago L Rev 775; Bankruptcy policymaking in an imperfect world’ (1993) 92 Mich L Rev 336; and see also Keay, ARInsolvency law: a matter of public interest?’ (2000) 51 NI L Q 509 at 527: ‘It is glib to say … that insolvency law only deals with economics and is only concerned with the plight of persons who have not been paid what they are owed.’

19. See generally S Paterson ‘Rethinking the role of the law of corporate distress in the twenty-first century’ LSE Law, Society and Economy Working Papers 27/2014.

20. See Jackson, TH The Logic and Limits of Bankruptcy Law (Cambridge, MA: Harvard University Press, 1986) p 14. For a European perspective, see Eidenmueller, HTrading in times of crisis: formal insolvency proceedings, workouts and the incentives for shareholders/managers’ [2006] Eur Bus Org L Rev 239.

21. For a discussion of ‘anti-commons’ problems, see Baird, DG and Rasmussen, RKAnti-bankruptcy’ (2010) 119 Yale L J 648; de Weijs, RJHarmonisation of European insolvency law and the need to tackle two common problems: common pool and anticommons’ (2012) 21 Int'l Insolv Rev 67; and, more generally, Heller, MAThe tragedy of the anticommons: property in the transition from Marx to markets’ (1998) 111 Harv L Rev 622.

22. In re ABC Learning Centres Ltd (2013) 728 F3d 301 at 307. The court cited Guzman, AInternational bankruptcy: in defense of universalism’ (2000) 98 Mich L Rev 2177 at 2179.

23. For the universalism versus territorialism debate, see Westbrook, JLA global solution to multinational default’ (2000) 98 Mich L Rev 2276; Lo Pucki, LThe case for co-operative territoriality in international bankruptcy’ (2000) 98 Mich L Rev 2216; Lo Pucki, LUniversalism unravels’ (2005) 79 Am Bankr L J 143; Rasmussen, RWhere are all the transnational bankruptcies? The puzzling case for universalism’ (2007) 22 Brook J Int'l L 983.

24. HR Rep No 109–31 at para 108.

25. See Westbrook, JLChapter 15 at last’ (2005) 79 Am Bankr L J 713 at 726.

26. On the UK generally, see the judgments of Lord Hoffmann in Cambridge Gas Transport Corporation v Official Committee of Unsecured Creditors (of Navigator Holdings Plc) [2007] 1 AC 508 and in Re HIH Casualty and General Insurance Ltd [2008] I WLR 852, distinguishing between the universalism and territorialism of insolvency proceedings and referring to the principle of modified universalism as the ‘golden thread’ of the common law. It should be noted that while Lord Collins in Rubin v Eurofinance [2012] UKSC 46 at para 92 hails ‘Lord Hoffmann's brilliantly expressed opinion in Cambridge Gas and his equally brilliant speech in HIH’, the UK Supreme Court in Rubin holds that Lord Hoffmann was wrong in Cambridge Gas. In Rubin, the UK Supreme Court paid lip service to the principle as an underlying principle of international insolvency law, but effectively denuded the principle of much practical power. The court seemed to foreclose the possibility of further judicial developments in this field, leaving the matter within the exclusive domain of the legislature and reciprocal arrangements with other countries. See also, to the same effect, the Privy Council in Singularis Holdings v PricewaterhouseCoopers [2014] UKPC 36, where Lord Neuberger at para 157 referred to ‘the extreme version of the principle of universality’ in Cambridge Gas.

27. [2014] FCAFC 57 at para 111.

28. See generally Clark, L and Goldstein, KSacred cows: how to care for secured creditors' rights in cross-border bankruptcies’ (2011) 46 Tex Int'l L J 513 at 518–519 describing ‘modified universalism’ as a practical alternative to the difficulty of implementing a fully universal system of international insolvency.

29. [2014] FCAFC 57 at para 120.

30. For a discussion of why ‘developed states’ may prefer ‘universalist’ insolvency norms, see Lord Hoffmann in Cambridge Gas Transport Corporation v Official Committee of Unsecured Creditors (of Navigator Holdings Plc) [2007] 1 AC 508l and for some reasons why developing countries might want to ring-fence assets for the benefit of local creditors, see the paper by the former Singapore Chief Justice Sek Keong, ChanCross-border insolvency issues affecting Singapore’ (2011) 23 Singapore Acad L J 413 at 419.

31. Ibid, at para 118. See also the paper by Judge Gropper, AThe payment of priority claims in cross-border insolvency cases’ (2011) 46 Tex Int'l L J 559, which notes at p 564 that there are few reported cases of assets being handed over to a foreign insolvency representative where there are potential disadvantages to US creditors.. He criticises the argument that Chapter 15 permits the remission of assets to a foreign representative over the objection of, and in derogation of the rights of, US priority creditors.

32. See HR Rep No 31, 109th Congress 1st Session at paras 106, 107, 109.

33. See Ranney-Marinelli, AOverview of Chapter 15 ancillary and other cross-border cases’ (2008) 82 Am Bankr L J 269.

34. Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd (2007) 374 BR 122 and affirmed (2008) 389 BR 325.

35. Chapter 15 has been described as consisting of as ‘a series of carefully crafted compromises’ and recognising a residual common law discretion would undermine these compromises and run counter to the spirit of the legislation – see Judge Clark, L ‘“Centre of main interests” finally becomes the center of main interest in the case law’ (2008) 43 Tex Int'l L J Forum 14 at 17.

36. The earlier law was contained in s 304 of the US Bankruptcy Code as originally enacted. See generally Westbrook, JLLocating the eye of the financial storm’ (2007) 32 Brook J Int'l L 1019; and see generally McCormack, GCOMI and comity in UK and US insolvency law’ (2012) 128 L Q Rev 140.

37. This is with the exception of Denmark, which has effectively opted out of the Regulation. The terms of the Danish opt-out were considered in Re Arena Corporation Ltd [2004] BPIR 375, where it was held that in accordance with recital (33) of the Regulation, Denmark was not to be considered as an EU ‘Member State’ for the purposes of the Regulation.

38. See Sch 1, Art 7: ‘Nothing in this Law limits the power of a court or a British insolvency officeholder to provide additional assistance to a foreign representative under other laws of Great Britain.’

39. For the parameters of common law judicial assistance, see now the Privy Council decision in Singularis Holdings v PricewaterhouseCoopers [2014] UKPC 36.

40. Section 426(4) uses the crucial words ‘shall assist’. Certain countries and territories have been designated by the Co-operation of Insolvency Courts (Designation of Relevant Countries and Territories) Order 1986, SI 1986/2123, as amended by SI 1996/253 and SI 1998/2766. These consist of Commonwealth countries and territories with the addition of the Republic of Ireland and Hong Kong, but excluding the US.

41. See UK Insolvency Service ‘Implementation of UNCITRAL Model Law on Cross-Border Insolvency in Great Britain’ (2005) at para 7.

42. [2009] BPIR 1157.

43. Articles 20 and 21.

44. See Judge Klein in Re Tri-Continental Exchange Ltd (2006) 349 BR 629 at 635.

45. (2007) 374 BR 122 and affirmed (2008) 389 BR 325. See also Re Basis Yield Alpha Fund (2008) 381 BR 37; Re Ernst & Young (2008) 383 BR 773.

46. See also on ‘establishment’ Re British American Insurance Company Ltd (2010) 425 BR 844.

47. See J Lewison in Re Stanford International Bank Ltd [2009] BPIR 1157 at para 66.

48. (2006) 349 BR 627 at 634.

49. (2010) 559 US 1 at 14–15.

50. (2010) 440 BR 60.

51. (2007) 374 BR 122.

52. Regulation 1346/2000.

53. [2006] ECR 1-03813 at para 37 and see the more recent Interedil Case C-396/09; [2011] BPIR 1639 and Mediasucre Case C-191/10; OJ 2012 C39/3. These cases suggest a slight relaxation of the presumption.

54. [2011] Ch 33 at para 54

55. Cases in the UK where the COMI test has been considered and applied in the context of the EU Regulation include Re Kaupthing Capital Partners II Master LP Inc [2010] EWHC 836, [2011] BCC 338; Re European Directories [2010] EWHC 3472 (Ch), [2012] BCC 46; and Re Arm Asset Backed Securities SA [2013] EWHC 3351 (Ch).

56. See Westbrook, JLAn empirical study of the implementation in the United States of the Model Law on Cross Border Insolvency’ (2013) 87 Am Bankr L J 247 at 261: ‘COMI is a very interesting issue but is generally not a major problem in the American courts.’

57. For information on the number of Chapter 15 filings, see the US Courts website, http://www.uscourts.gov/Statistics/BankruptcyStatistics.aspx, which reveals that there were 58 filings in 2014, 33 of which were either in the Southern District of New York or Delaware.

58. For a different view on the empirical data, see Leong, JIs Chapter 15 universalist or territorialist? Empirical evidence from the United States Bankruptcy Court cases’ (2011) 29 Wis Int'l L J 110. See also the comment by Lo Pucki, above n 23, at 166: ‘Universalists are trying to bring their system in through the back door. The UNCITRAL Model Law was negotiated by a delegation led by universalist Jay L Westbrook, and then sold to Congress as not really universalist.’

59. The court might conclude that the company was a letterbox company, and Re Kaupthing [2010] EWHC 836 (Ch), [2011] BCC 338 is a somewhat analogous UK case where the registered office/COMI presumption was applied but held to have been rebutted in respect of a letterbox company.

60. (2013) 714 F3d 127.

61. On the definition of ‘establishment’, see Re British American Insurance Company Ltd (2010) 425 BR 844, where J Kimball said at para 30: ‘To have an establishment in a country, the debtor must conduct business in that country. The location should constitute a “seat for local business activity” for the debtor … The term “operations” and “economic activity” require showing of a local effect on the marketplace, more than mere incorporation and record-keeping and more than just the maintenance of property.’ See also Lavie v Ran (2009) 406 BR 277, 286: ‘From the outset, it stretches credulity to view a bankruptcy proceeding as an industrial or professional activity … Further, though a bankruptcy proceeding does pertain to economic matters, it does not comport with traditional notions of economic activity in the marketplace.’ For an ‘establishment’ under the EU Insolvency Regulation, the English Court of Appeal has required ‘external, market-facing activity’ and not merely the carrying out of a liquidation process – see Re Olympic Airlines SA [2015] UKSC 27.

62. See Re Emerging Global Emerging Credit Master Fund Ltd (2011) 458 BR 63 for contrary US authority suggesting that the court, in deciding a recognition application, should consider COMI on the date of the commencement of the relevant foreign proceedings.

63. It seems that the background to the revised guide is concerns by the US delegation about judicial interpretations of the Model Law. But perhaps such concerns are best addressed by changes to domestic law that implements the Model Law. For a general discussion explaining the background, see Look Chan Ho ‘The revised UNCITRAL Model Law Enactment Guide – a welcome product’ [2014] J Int'l Bank L & Reg 325.

64. See revised guide at para 159 and see generally the discussion at paras 157–160.

65. See the statement in In re Globo Communicacoes E Participacoes SA (2004) 317 BR 235 at 249 that ‘courts have required only nominal amounts of property to be located in the United States’, and have noted that there is ‘virtually no formal barrier’ to having US courts adjudicate bankruptcy proceedings in respect of foreign debtors. See generally Healy, EAll's fair in love and bankruptcy? Analysis of the property requirement for Section 109 eligibility and its effect on foreign debtors filing in US Bankruptcy Courts’ (2004) 12 Am Bankr Inst L Rev 535.

66. See In re Global Ocean Carriers Ltd (2000) 251 BR 31, which concerned a shipping company headquartered in Greece and where it was held that the unearned portions of retainers provided to US counsel constituted property that was sufficient to form the basis for a US bankruptcy filing.

67. See Re Yukos Oil Co (2005) 321 BR 396; Re Aerovias Nacionales de Colombia SA Avianca (2004) 303 BR 1; and see generally Hoogland, MRecent trends in international Chapter 11 cases: pragmatic reorganizations’ (2006) 41 Tex Int'l L J 145.

68. See Hong Kong & Shanghai Banking Corp v Simon (In re Simon) (1998) 153 F3d 991 at 996: ‘Congress intended extraterritorial application of the Bankruptcy Code as it applies to property of the estate.’

69. See s 362(a).

70. See Nakash v Zur (In re Nakash) (1996) 190 BR 763, where the automatic stay was enforced against a foreign receiver in respect of the foreign assets of a foreign debtor.

71. To reinforce the message to creditors and others, the stay is sometimes backed up by a judicial restraining order, whether temporary or permanent, and this has been described in Nakash v Zur (In re Nakash) (1996) 190 BR 763 at 767 as a prophylactic measure to apprise third parties of the existence and effect of s 362 of the US Bankruptcy Code.

72. (2010) 434 BR 334.

73. Ibid, at p 14 of the judgment.

74. Ibid, at p 16.

75. See Mazur Media Ltd v Mazur Media GmbH [2004] 1 WLR 2966 and Bloom v Harms Offshore AHT [2010] Ch 187. See also Re Vocalion (Foreign) Ltd [1932] 2 Ch 196 and Kemsley v Barclays Bank [2013] EWHC 1274.

76. See Stichting Shell Pensioenfonds v Krys [2014] UKPC 41.

77. On the relative merits of debtor-in-possession versus management displacement restructuring regimes, see Hahn, DConcentrated ownership and control of corporate reorganisations’ (2004) 4 J Corp Legal Stud 117; McCormack, GControl and corporate rescue – an Anglo-American Evaluation’ (2007) 56 Int'l Comp L Q 515.

78. According to In re Lionel Corp (1983) 722 F 2d 163 at 1071, a judge is required to find from the evidence a good business reason to approve the sale though the bankruptcy court is said to have broad discretion and flexibility to enhance the value of the estate before it. Salient factors include whether the asset is increasing or decreasing in value.

79. Krys v Farnum Place LLC (In re Fairfield Sentry Ltd), No 13-3000, 2014 WL 4783370 (2d Cir 26 September 2014).

80. Re Condon, ex parte James (1874) LR 9 Ch 609. For a general discussion of the rule, see Dawson, IThe administrator, morality and the court’ [1996] J Bus L 437.

81. Re TH Knitwear (Wholesale) Ltd [1988] Ch 275 at 288 per Slade, LJ referring to the observations of Lord Esher MR in Ex parte Simmonds (1885) 16 QBD 308 at 312.

82. See the comments of Templeman, J in Re Wyvern Developments Ltd [1974] 1 WLR 1097 at 1105 and J Harman in Re John Bateson & Co Ltd (1985) 1 BCC 99378.

83. Schedule B1 Insolvency Act 1986, para 5.

84. Re TH Knitwear (Wholesale) Ltd [1988] Ch 275.

85. See the discussion by J Morgan in Re Pan Ocean Co Ltd [2014] EWHC 2124 (Ch) at paras 81–87 and see his conclusion at para 87: ‘My reaction to the discussions of the working group is that it seems improbable that the working group, having deleted (from what is now Article 21(1)(g)) a power for the recognising court to apply the law of the foreign proceeding, intended to bring back in such a power under the general wording which refers to “any appropriate relief”’.

86. See s 548(a)(1(b).

87. See HR Rep No 109-31 at para 152.

88. For a recent example of such an attempt, see Re Hellas Telecommunications (Luxembourg) 11 SCA: Hosking v TPG US Bankruptcy Court SDNY 29 January 2015 (Judge Martin Glenn).

89. Section 109(3) Bankruptcy Code.

90. (2010) 601 F 3d 319. For criticism, see Schorr, SAvoidance actions under Chapter 15: was condor correct?’ (2011) 35 Fordham Int'l L J 350. See also Re Hellas Telecommunications (Luxembourg) 11 SCA: Hosking v TPG (US Bankruptcy Court, SDNY 29 January 2015).

91. See (2010) 601 F 3d 319 at 325–327.

92. (2010) 601 F 3d 319 at 327.

93. (2010) 601 F 3d 319 at 329.

94. (1987) 78 BR 674.

95. See Re Axona International Credit & Commerce Ltd (1988) 88 BR 597.

96. [2014] EWHC 2124 (Ch) at para 106.

97. In re Maxwell Communication Corporation (1994) 170 BR 800; affirmed (1995) 186 BR 807; affirmed (1996) 93 F3d 1036, 1051. See generally McCormack, G ‘Conflicts, avoidance and international insolvency 20 years on’ [2013] J Bus L 141.

98. See Re Hellas Telecommunications (Luxembourg) 11 SCA: Hosking v TPG US Bankruptcy Court SDNY 29 January 2015 (Judge Martin Glenn), which involves the almost converse situation where a foreign insolvency representative sought to avoid transactions on the basis of New York Debtor and Creditor Law, but the court rejected the attempt on the basis, inter alia, that the relevant transactions were more closely related to foreign law (which did not allow avoidance in the particular case).

99. [2014] EWHC 2124 (Ch).

100. Ibid, at paras 81–87.

101. [2013] 1 AC 236 at para 143.

102. [2014] EWHC 2124 (Ch) at para 112.

103. See Cross-Border Insolvency Regulations 2006, SI 2006/1030 Sch 1, Art 23(1), which sets out the list of avoidance actions to which the provision is intended to apply.

104. See ‘UNCITRAL Model Law on Cross-Border Insolvency with revised guide to enactment and interpretation’ (2013) at paras 101, 102.

105. Millet, PCross-border insolvency: the judicial approach’ (1997) 6 Int'l Insolv Rev 99 at 109.

106. See generally McCormack, GBankruptcy forum shopping: the UK and US as venues of choice for foreign companies’ (2014) 63 Int'l Comp L Q 815 at 816819, 823–824.

107. In re Toft (2011) 453 BR 186. See also In re Gold & Honey Ltd (2009) 410 BR 357.

108. Re a BankruptPrager v Toft [2012] BPIR 469, citing Foxley v UK [2000] BPIR 1009.

109. See also the Congressional report on Chapter 15: HR Rep No 109-31 at para 109.

110. (2013) 728 F3d 301.

111. (1895) 159 US 113 at 202–203.

112. (1999) 238 BR 25 at 66 and affirmed (2002) 238 BR 699.

113. (2006) 349 BR 333.

114. Re Metromedia FiberNetwork Inc (2005) 416 F3d 136.

115. (2013) 501 BR 655 (SDNY).

116. In re Metcalfe & Mansfield (2010) 421 BR 685.

117. In re Vitro SAB de CV (2012) 701 F 3d 1031. For another case in a somewhat different context, involving the denial of comity to Mexican proceedings, see Milbank v Phillips Lighting (2014) 521 BR 189.

118. (2012) 701 F 3d 1031 at 1054.

119. But see Re Atlas Shipping A/S (2009) 404 BR 726, where it was said that the jurisdiction to grant appropriate relief was ‘exceedingly broad’.

120. Reference was made to In re Ran (2010) 607 F3d 1017 at 1021 and Metcalfe 421 BR at 697.

121. (2013) 737 F3d 14.

122. (2011) 462 BR 165.

123. Section 365(n) Bankruptcy Code.

124. (2011) 462 BR 165 at 182.

125. (2011) 462 BR 165 at 185.

126. The importance of creditor rights in insolvency proceedings including management displacement in favour of an outside administrator was stressed in the ‘legal origins’ or ‘law matters’ thesis; on which see La Porta, R et al. ‘Legal determinants of external finance’ (1997) 52 J Fin 1131 and, by the same authors, ‘Law and finance’ (1998) 106 J Pol Econ 113. See also La Porta, R, Lopez-de-Silanes, F and Shleifer, AThe economic consequences of legal origins’ (2008) 46 J Econ Lit 285, in which the authors refine the ‘legal origins’ thesis and defend it against criticisms.

127. It seems though that the position is more controversial in relation to voluntary arrangements under the Insolvency Act – see Johnson v Davies [1999] Ch 117. In Australia, a distinction is also drawn between non-debtor releases in schemes of arrangement and deeds of company arrangement – so-called ‘docas’ – see Fowler v Lindholm (2009) 178 FCR 563 and City of Swan v Lehman Bros Australia Ltd [2010] HCA 11; and see generally Harris, JCharting the limits of insolvency reorganisations’ (2010) 32 Sydney L Rev 141.

128. See Re Pan Ocean Co Ltd [2014] EWHC 2124 (Ch) at paras 90–92 and Rubin v Eurofinance SA [2013] 1 AC 236 at para 28 per Lord Collins. It should be noted, however, that in the absence of statutory authority, the UK courts cannot permit a foreign liquidator to do the same kind of things that might be done in a domestic insolvency – see Singularis Holdings v PricewaterhouseCoopers [2014] UKPC 36.

129. [2006] EWHC 1447 (Ch), [2007] 1 All ER 851.

130. [2009] EWCA Civ 1161; [2010] BCC 272. See also Re La Seda de Barcelona SA [2010] EWHC 1364 (Ch); [2011] 1 BCLC 555.

131. Ibid, at para 63. Lord Neuberger MR implied that creditors’ rights against the third parties should be closely connected with their rights as creditors against the company, and he also said that the decision in T&N Ltd (No 3) was near the outer limits of the court's jurisdiction to sanction schemes of arrangement.

132. See also the generally accepted principle of English law articulated in Wight v Eckhardt Marine GmbH [2003] UKPC 37, [2004] 1 AC 147 at para 11 that the discharge of a contract is governed by its proper law; that is, a discharge from any debt or liability under a foreign insolvency law is recognised as a discharge from the debt or liability in England if, and only if, it is a discharge under the law that applies to the contract. This principle was held in the PT Bakrie case [2011] EWHC 256 (Comm); [2011] 1 WLR 2038 to have survived the Model Law and the enactment of the Cross-Border Insolvency Regulations.

133. Case C-341/04 Re Eurofood IFSC Ltd [2006] ECR 1-03813 and the more recent Interedil Case C-396/09; [2011] BPIR 1639 and Mediasucre Case C-191/10; OJ 2012 C39/3 cases.

134. See Leong, above n 58; and Yeatter, KJudicial vagaries and their potential impact on the valuation of distressed debt: reasonable minds can differ as to what it all means’ (Nov 2007) 26 Am Bankr Inst J 50 at 51.

135. See Westbrook, above n 56, at 254.

136. See the revised guide at para 159 and the discussion at paras 157–160.

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