Bankruptcy Law Commons^™

Layering, Conversion, And Drifting: A Comparative Analysis Of Path Dependent Change In Consumer Insolvency Systems, Megan Mcdermott

Chicago-Kent Law Review

The past twenty-five years have been marked by major developments in consumer insolvency systems around the world. The threshold challenge for comparative scholars is to keep up with the changes occurring in individual countries, as a necessary—but preliminary—step toward broader comparisons of the historical, social, and institutional forces in consumer bankruptcy. In order for deeper work to take place, though, the field needs consensus on what factors are most useful to analyze. Moreover, the dynamic environment of consumer insolvency requires a framework for analysis that is flexible and adaptable enough to provide insights notwithstanding the rapid changes in the field. …

Market Organisations And Institutions In America And England: Valuation In Corporate Bankruptcy, Sarah Paterson

Chicago-Kent Law Review

Courts in England and the United States have traditionally adopted different approaches to the question of valuation in debt restructuring cases. In England, courts have tended to determine whether to approve the allocation of equity in a debt restructuring by reference to the amounts creditors would have received if no debt restructuring had been agreed. The company has typically argued that if no debt restructuring had been agreed either the business or the assets would have been sold. Typically, some evidence of exposure of the business and assets to the market will be submitted to identify the value which would …

Fiduciary Duties Of Directors Of Insolvent Corporations: A Comparative Perspective, Alessandra Zanardo

Chicago-Kent Law Review

Over the last two decades, in many jurisdictions great emphasis has been placed on directors’ fiduciary duties when a corporation is insolvent or in the amorphous “zone of insolvency”; notably, to investigate whether the directors should continue to promote the best interests of the corporation for the benefits of its shareholders, or whether their duties shift to creditors.

The resolution of this ubiquitous issue will help to answer the following questions: Do creditors have standing to pursue claims for breach of fiduciary duties in the insolvency scenario? And, if they do, is it direct or derivative standing?

This Article will …

Modularity In Cross-Border Insolvency, Andrew B. Dawson

Chicago-Kent Law Review

This Article proposes a framework for thinking about the design structure of the Model Law on Cross-Border Insolvency. The Model Law has been successful by many metrics; however, it has faced various implementation challenges. As leading scholar Professor Jay Westbrook has noted, thinking about these problems requires thinking about the Model Law as a system. To understand the system, it is necessary to understand its architecture, and I argue that this architecture is best understood as reflecting a modular design structure, i.e., one that divides complex systems into a hierarchical system of self-contained components. Modularity has provided insights into other …

International And Domestic Law Aspects Of Cross-Border Insolvency In Order To Establishing Cross-Border Insolvency Regulation In Asean: Indonesian Perspective, Moch Najib Imanullah, Emmy Latifah, Pramesthi Dinar Kirana Ratri

Indonesia Law Review

The increases in cross-border trade has resulted in more companies with assets, business, and presence in multiple jurisdiction. When any of these companies face debt restructuring or insolvency, it confronts a myriad of complex issues in coordinating rescue proposals or winding up the businesses across jurisdictions. Prior to the 1997 economic crisis, insolvency laws in most state economies were generally out of date and irrelevant to the modern commercial needs, particulary the cross-border insolvency matters that has not been well regulated. ASEAN has initiated an integrated economy regional by launching an ASEAN Economic Community on late 2015. It aimed to …

Fiduciary Duties In Bankruptcy And Insolvency, John A. E. Pottow

Law & Economics Working Papers

Insolvency law (bankruptcy law to some) moves so quickly in the cross-border realm that this piece's discussion, started in 2015, is probably already outdated. Nonetheless, I publish it unrepentently because it turns overdue attention to the role of soft law in this domain. Building on earlier work in which I address the role of incrementalism, I discuss the marked success of the UNCITRAL Model Law on Cross-Border Insolvency and its cognate Insolvency Regulation in the EU (the latter now into its "Recast"). As predicted/hoped, the EU Recast, joining other contemporaneous reform projects, is building upon the scaffolding of legal doctrines …

The Restructuring Plan And The Role Of Foreign Investments In Italian System, Vito Cozzoli, Antonio Morelli

Arbitration Brief

No abstract provided.

Sovereign Debt Restructuring And English Governing Law, Steven L. Schwarcz

Brooklyn Journal of Corporate, Financial & Commercial Law

The problem of sovereign indebtedness is becoming a worldwide crisis because nations, unlike individuals and corporations, lack access to bankruptcy laws to restructure unsustainable debt. Decades of international efforts to solve this problem through contracting and attempted treaty-making have failed to provide an adequate debt-restructuring framework. A significant amount of outstanding sovereign debt is governed, however, by English law. This Article argues that the U.K. Parliament has the extraordinary power to help solve the problem of unsustainable country debt by changing English law to facilitate fair and consensual debt restructuring. This Article also proposes modifications to English law that Parliament …

Cross-Border Insolvencies: To “Universalize” Or To Arbitrate?, Young Hye (Martina) Chun

Pepperdine Dispute Resolution Law Journal

This note makes a cost-benefit analysis of the U.S. Bankruptcy Code Chapter 15 and International Commercial Arbitration in the context of cross-border bankruptcy proceedings. Part I sets the stage by providing two opposing theoretical approaches to cross-border insolvencies: territorialism and universalism. Part II introduces the UNCITRAL’s Model Law on Cross-Border Insolvency, which is incorporated into the U.S. Bankruptcy Code Chapter 15. It presents how the Model Law has attempted to compensate for the lack of a global court by incorporating universalism. Part III demonstrates that while Chapter 15 sounds good in theory, it fails to address the very issue it …

From Dust We Are And To Dust We Will Return: Eu's Utopia, Greece's Bankruptcy, Carolina Kripinski

Barry Law Review

No abstract provided.

Pari Passu As A Weapon And The Changes To Sovereign Debt Boilerplate After Argentina V. Nml, David Newfield

University of Miami Business Law Review

The pari passu clause is found in nearly every sovereign debt contract issued throughout the globe. In the private context, this clause is well understood to ensure fair distributions to all creditors in the event of bankruptcy and liquidation. As insolvency distributions are not an option when dealing with distressed sovereign debt, the rights and duties associated with this clause have been subject to extensive litigation for over 20 years.

Starting from the case of Elliot v. Peru, in the early 1990s, and more recently in Argentina v. NML, courts have interpreting these bonds, governed subject to New York law, …

Can Parallel Lines Ever Meet? The Strange Case Of The International Standards On Sovereign Debt And Business And Human Rights, Daniel D. Bradlow

Scholarly Articles in Law Reviews & Journals

This special issue is a cooperation of the Yale Journal of International Law and the United Nations Conference on Trade and Development (UNCTAD). It emerged from UNCTAD’s work on sovereign debt workouts, specifically from its Working Group on a Sovereign Debt Workout Mechanism (2013 to 2015). The working group developed a Roadmap and Guide for Sovereign Debt Workouts, published in 2015. It proposes an incremental approach to sovereign debt workouts that relies on the continuous, progressive development of sovereign debt restructuring practice. This work has inspired the adoption of Basic Principles for Sovereign Debt Restructuring by the United Nations General …

Treating The New European Disease Of Consumer Debt In A Post-Communist State: The Groundbreaking New Russian Personal Insolvency Law, Jason J. Kilborn

Brooklyn Journal of International Law

This article examines the tumultuous transition from restrictive Communism to the debt-fueled consumer economy of modern Russia. In particular, it surveys Russia’s legal response to severe debt distress, situating it in the context of nearly one thousand years of historical development. Effective 1 October 2015, Russia finally joined most of its European neighbors in adopting a personal bankruptcy law, with characteristics that reflect both evolving international best practices and a series of lessons not learned. This article offers the first detailed exposition in English of the two steps forward represented by this new law, as well as an evaluation of …

Regulatory Incentive Realignment And The Eu Legal Framework Of Bank Resolution, Andromachi Georgosouli

Brooklyn Journal of Corporate, Financial & Commercial Law

Risks associated with incentive misalignment are liable to seriously jeopardize the effectiveness of bank resolution, when not properly contained. This Article considers the management of misaligned incentives between regulators that are found in a vertical relationship of public governance. Using the EU legal framework of bank resolution as its case study, this Article explores the effectiveness of the quasi-enforcement powers of the Single Resolution Board (SRB) and, where relevant, of the European Banking Authority (EBA) as an incentive realignment legal technique. Two principal difficulties are identified: on the one hand, the problematic interinstitutional dynamic of the SRB and the EBA …

Reflections Of The World Bank’S Report On The Treatment Of The Insolvency Of Natural Persons In The Newest Consumer Bankruptcy Laws: Colombia, Italy, Ireland, Jason J. Kilborn

Pace International Law Review

In 2011, the World Bank initiated its first-ever examination of the policies and characteristics of effective insolvency systems for individuals (natural persons). This paper describes the two-year process that led to the publication of the World Bank’s landmark Report on the Treatment of the Insolvency of Natural Persons. After examining the key content and three major themes of the Report, three of the most recent new personal insolvency regimes are introduced with an eye to identifying the ways in which the themes of the Report are reflected in these new laws. The personal insolvency provisions in Colombian law most directly …

Beyond Carve-Outs And Toward Reliance: A Normative Framework For Cross-Border Insolvency Choice Of Law, John A. E. Pottow

Law & Economics Working Papers

Choice of law in cross-border insolvency is gaining increased attention, not just by lowly academics but by policymakers who actually matter. I argue it is time to bring some normative guidance to the burgeoning reform efforts. At the highest level of theoretical purity, universalism seems to have (rightly) captured the biggest following. But it has been scaled back by what I call “second-order” considerations of pragmatics to its lesser, modified form. I take that retrenchment as necessary and note how it has been deployed through a carveout-based regime of subject-specific exceptions from lex fori concursus. Given that lay of the …

Restructuring A Sovereign Bond Pari Passu Work-Around: Can Holdout Creditors Ever Have Equal Treatment?, Natalie A. Turchi

Fordham Law Review

    The rise of vulture fund investing in sovereign bonds has created additional hurdles to successful restructuring in an already fragile ad hoc process. Recent litigation in NML Capital, Ltd. v. Argentina has proven courts’ willingness to utilize powers of equity to enforce a ratable payment interpretation of the pari passu clause—the equal treatment provision commonly found in sovereign bond contracts—creating much uncertainty on how the ruling will affect future restructuring efforts. By looking to the tension in interpretations of the pari passu clause, discrepancies in remedial relief awarded, and international institutions’ proposed solutions, this Note analyzes the role of the …

Review Of Sovereign Defaults Before International Courts And Tribunals, John A. E. Pottow, Emily Iversen

Reviews

This book review probes Michael Waibel’s new book, Sovereign Defaults Before International Courts and Tribunals. Waibel's project is ambitious, exploring international attempts to address sovereign defaults over the past century and a half. Through painstaking and comprehensive historical analysis, Waibel shows how we've been here before -- a sober reminder for those thinking Argentina is simply part of a new fad in financial default. With the UN now turning its attention to sovereign debt issues, this study is especially timely. Although somewhat disappointing in the lightness of its normative content, the book should nevertheless prove helpful to those considering the …

Producing Better Mileage: Advancing The Design And Usefulness Of Hybrid Vehicles For Social Business Ventures, John E. Tyler, Evan Absher, Kathleen Garman, Anthony J. Luppino

Faculty Works

Since 2008 approximately half of the states in the U.S. have enacted statutes permitting “hybrid” business forms that blend aspects of traditional for-profit ventures with characteristics normally associated with traditional non-profit entities. This article analyzes theoretical, academic, practical, legal, and regulatory questions regarding the extent to which the existing hybrids are suited to achieving social purposes objectives, including in comparison to modified traditional forms of business organization. Finding the current fleet of hybrids an innovative, useful start, but with need to evolve, this article proposes statutory language (set forth in a detailed appendix, and summarized in the article text), and …

Non-Dischargeability Of Mixed Student Debt, Jordan Weiss

Cardozo Public Law, Policy & Ethics Journal

No abstract provided.

Revisiting Sovereign Bankruptcy, Lee C. Buchheit, Anna Gelpern, Mitu Gulati, Ugo Panizza, Beatrice Weder Di Mauro, Jeromin Zettelmeyer

Faculty Scholarship

Sovereign debt crises occur regularly and often violently. Yet there is no legally and politically recognized procedure for restructuring the debt of bankrupt sovereigns. Procedures of this type have been periodically debated, but so far been rejected, for two main reasons. First, countries have been reluctant to give up power to supranational rules or institutions, and creditors and debtors have felt that there were sufficient instruments for addressing debt crises at hoc. Second, fears that making debt easier to restructure would raise the costs and reduce the amounts of sovereign borrowing in many countries. This was perceived to be against …

Cross-Border Insolvency Problems: Is The Uncitral Model Law The Answer?, S. Chandra Mohan

Research Collection Yong Pung How School Of Law

This paper examines the impact that the UNCITRAL Model Law on Cross-border Insolvency has had on States in the light of the central problems often associated with transnational insolvencies. Despite the accolades that it has received, the Model Law has been adopted in only 19 countries in the last 15 years and that too in many different ways. If the number of adoptees and the rather conditional acceptance of the Model Law’s provisions represent a lack of international enthusiasm for adopting the Model Law, what are the reasons for this? The paper concludes by asking whether the UNCITRAL Model Law …

Were "It" To Happen: Contract Continuity Under Euro Regime Change, Robert C. Hockett

Cornell Law Faculty Working Papers

One way or another, the European Monetary Union (EMU) is apt to endure. The prospect of continuation under the precise contours of the regime as we presently find it, however, is anything but certain. Hence many investors and other actual or prospective contract parties are likely to remain skittish until matters grow clearer. This skittishness, importantly, can itself hamper the prospect of expeditious European recovery. Addressing particular sources of ongoing uncertainty about EMU prospects can itself therefore aid in the project of recovery.

This Essay accordingly aims to impose structure upon one particular, and indeed particularly complex, source of uncertainty …

Cross-Border Bankruptcy And The Cooperative Solution, Leah Barteld

Student Articles and Papers

Cross-border bankruptcy continues to be an important topic within bankruptcy regimes worldwide. As more corporations find themselves interacting in a market without the confines of geographic borders, countries need to adapt their regulatory schemes to be able to properly handle an orderly liquidation or reorganization without an adverse impact on the economy. This paper discuses the challenges of a cross-border bankruptcy regime that would be effective and proposes a cooperative solution for increasing coordination among insolvency proceedings. As a result of increasing cooperation among jurisdiction in light of the recent and ongoing financial crisis, reform within the bankruptcy regimes around …

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 …

A Test Case In International Bankruptcy Protocols: The Lehman Brothers Insolvency, Jamie Altman

San Diego International Law Journal

Part II of this Article, explains the competing theories underlying bankruptcy systems: universalism and territorialism. Part III details various statutory solutions to international bankruptcy problems. Next, Part IV analyzes the provisions of the Lehman Protocol in depth. Part V then examines the precedent upon which the Lehman Protocol relies. Part VI assesses potential threats to the Protocol?s success. This leads to Part VII, which contains suggestions for future protocols. Finally, Part VIII concludes.

Iflas And Chapter 11: Classical Islamic Law And Modern Bankruptcy, Abed Awad, Robert E. Michael

Elisabeth Haub School of Law Faculty Publications

There is no question that the orderly development of Islamic finance will require finding ways to amalgamate the classical Islamic law of bankruptcy with the needs of the modern Islamic finance industry. The unreasonable reliance on ever-expanding opportunities has disappeared along with the global credit markets. It is therefore inescapable that loss scenarios must be dealt with. That in turn means effective bankruptcy laws. We hope this article will help foster the effort.

Bankruptcy Policy: A Review And Critique Of Bankruptcy Statutes And Practices In Fifty Countries Worldwide, Ziad Raymond Azar

Cardozo Journal of International and Comparative Law

Bankruptcy law plays a crucial role in a capitalist economy by facilitating resource reallocation through creative destruction, with its effectiveness hinging on balancing creditor protection and debtor rehabilitation. The article examines bankruptcy statutes and practices across 50 countries, emphasizing the need for efficient, practical reforms that maximize estate value while addressing global diversity in insolvency frameworks. It advocates for a comprehensive approach to bankruptcy law, ensuring transparency, fairness, and alignment with economic goals.

The Westernization Of Chinese Bankruptcy: An Examination Of China's New Corporate Bankruptcy Law Through The Lens Of The Uncitral Legislative Guide To Insolvency Law, Steven J. Arsenault

Penn State International Law Review (1982 - 2011)

No abstract provided.

Accessing The Effects Of Chapter 15: Cross-Border Insolvency Cases In Us Bankruptcy Courts From 1995-2006, Roxane Delaurell

South Carolina Journal of International Law and Business

No abstract provided.