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An Innovative Framework: Evaluating The New German Business Stabilization And Restructuring Law (Starug), Andreas Rauch

Northwestern Journal of International Law & Business

This comment examines the restructuring framework, restrukturierungsgesetz (“StaRUG”), and argues that this new law represents an effective—albeit radical—departure from Germany’s previous, conservative insolvency regime. Passed in response to a 2019 EU Directive aimed at modernizing restructuring law Union-wide, and integrated into the German legal system against the backdrop of the COVID-19 pandemic, StaRUG and its ancillary reforms in other areas of German law create a restructuring proceeding that places a premium on a debtor’s continued business operations. Thus, in a striking shift from the traditional German approach to business distress, which strongly emphasized creditor rights, the new StaRUG focuses on …

Clarity About Comity: How Courts Have Attempted Greater Guidance For Chapter 15 Litigants, Sabrina Lieberman

Northwestern Journal of International Law & Business

Abstract

This note explores the development of courts’ refusal to extend comity to foreign representatives who have filed a proceeding under chapter 15 of the U.S. Bankruptcy Code. Congress adopted chapter 15 as part of a comprehensive 2005 bankruptcy reform. It allows foreign entities to receive protection under the U.S. Bankruptcy Code. In most cases, foreign representatives who file a chapter 15 proceeding are involved with ancillary insolvency proceedings outside the United States. There is often a question of how or if a U.S. court overseeing the chapter 15 proceeding will defer to a judgment or process within the foreign …

Chasing The Fruits Of Misery: Confronting The Historical Relationships Between Opioid Revenues, Offshore Financial Centers, And International Regulatory Networks, Stephen C. Wilks

Northwestern Journal of International Law & Business

As the opioid crisis continues to claim lives throughout the U.S., tort litigants have faced challenges pursuing Purdue Pharma – one of the drug makers responsible for aggressively promoting OxyContin while downplaying the drug’s addictive effects. Much of this litigation posture sought to recover billions in public health costs incurred responding to the crisis at federal, state and local levels. As the plaintiff class grew, Purdue Pharma petitioned for bankruptcy protection, at which point auditors discovered the entity’s beneficial owners had caused it to wire billions in opioid profits into offshore accounts – placing them beyond the reach of litigants. …

The Scorecard So Far: Emerging Issues In Cross-Border Insolvencies Under Chapter 15 Of The U.S. Bankruptcy Code, Megan R. O'Flynn

Northwestern Journal of International Law & Business

Chapter 15 of the U.S. Bankruptcy Code was modeled after the Model Law on Cross-Border Insolvency, drafted by the United Nations Commission on International Trade and Law (UNCITRAL) in 1997. Despite the relatively small number of cases commenced in U.S. Courts under Chapter 15 since its adoption, no other section of the current Bankruptcy Code has broader implications for international business transactions and global foreign business relations than the provisions of Chapter 15. Moreover, since the United States has long been an innovator at the forefront of international insolvency law, interpretation of key provisions of the Chapter and related UNCITRAL …

Bankruptcy Law Dilemma: Appraisal Of Corporate Value And Its Distribution In Corporate Reorganization Proceedings, Jongho Kim

Northwestern Journal of International Law & Business

This article will analyze issues arising in reorganization proceedings with which the bankruptcy court has not yet grappled. If the questions arising in the remainder of this article can be clearly answered, then to a certain extent numerous arguments about Chapter 11 can be settled. This article will also analyze both Korean and U.S. bankruptcy law and will maintain a comparative approach with a critical perspective. Though Korean bankruptcy law indirectly adopted11 that of the United States in 1962, the actual application and interpretation of Korean bankruptcy law is quite different and I will accurately compare and contrast the two …

Center Of Main Interests, International Insolvency Case Venue, And Equality Of Arms: The Eurofood Decision Of The European Court Of Justice, Samuel L. Bufford

Northwestern Journal of International Law & Business

The European Court of Justice ("E.C.J.") issued a ruling on May 2, 2006 in the Eurofood case, finding that the commencement of an insolvency case for Eurofood in Ireland gave the Irish court priority under E.U. law over a similar insolvency case commenced shortly thereafter in Italy. The E.C.J.'s ruling responded to the Supreme Court of Ireland's referral to the E.C.J. of five questions of E.U. law based on the E.U. Regulation on Insolvency Proceedings ("E.U. Regulation"). The Irish Supreme Court had referred these questions to the E.C.J. preliminary to deciding a pending appeal of the Dublin High Court's decision …

The New Chapter 15 Of The Bankruptcy Code: A Step Toward Erosion Of National Sovereignty, John J. Chung

Northwestern Journal of International Law & Business

If Chapter 15 and universalism offer uncertain benefits but certain harms, why have their principles gained such a following? One explanation is that Chapter 15 is part of today's growing trend to internationalize American law. Much like the inclination of some Supreme Court Justices to look to foreign law for guidance, it appears many bankruptcy scholars, judges, and practitioners have developed a taste for international trendiness. This article contends that the debate surrounding Chapter 15 in bankruptcy circles is a variation of the ongoing national debate regarding the citation of foreign law in Supreme Court opinions. This internationalism is a …

The Innovative German Approach To Consumer Debt Relief: Revolutionary Changes In German Law, And Surprising Lessons For The United States, Jason J. Kilborn

Northwestern Journal of International Law & Business

This Article seeks to achieve two goals as it describes the consumer provisions of the new German Insolvency Act. First, it reveals critical distinctions between the theory of consumer insolvency, as described in German law and legal literature, and the reality of consumer insolvency in practice, as it has developed in the four-and-a-half years since the law went into effect. From both theoretical and practical perspectives, the German experience both supports and challenges many of the notions underlying consumer bankruptcy reform debates in the United States. As it turns out, the German and U.S. consumer debt relief systems produce largely …

Russia's Intactable Economic Problems And The Next Steps In Legal Reform: Bankruptcy And The Depoliticization Of Business , William P. Kratzke

Northwestern Journal of International Law & Business

Law reform in Russia proceeds on many fronts. This paper takes the position that the most important legal reforms for Russia are those that eliminate the reward system that encourages economic activity that can be highly inefficient. These legal reforms are an effective bankruptcy law and the de-politicization of business. The two go hand-in-hand. It is the politicization of business that renders Russia's bankruptcy laws ineffective by making non-viable business entities .appear to be solvent. These two reforms, were they adequately implemented, would eliminate rewards for inefficiency. Only when the Russian government-and its people-have removed this reward system can conditions …

Wysko Investment Company V. Great American Bank: A New Attack On The Usefulness Of Letters Of Credit, Robert Jay Gavigan

Northwestern Journal of International Law & Business

The letter of credit has long been accepted as a valuable instrument of assured payment in international business. In Wysko Investment v. Great American Bank, however, an Arizona district court jeopardized the usefulness of the letter of credit transaction by enjoining payment to the beneficiary after the issuing party became insolvent.' This note addresses the issue of whether a bankruptcy court has the power to enjoin payment of a letter of credit issued by the debtor's principal, pursuant to 11 U.S.C. § 105(a), when the court finds the injunction necessary for the debtor's reorganization. Further, this note examines whether such …