7 Pages


Many insolvencies (particularly, and increasingly, corporate insolvencies) have international aspects to them in that either the assets or the creditors, or both, are in more than one jurisdiction. Whilst the most efficient and, therefore, asset-maximising approach would be for the insolvency to be dealt with in one set of proceedings with universal effect, there are tremendous problems in achieving such an outcome. Jurisdictions adopt different approaches to the question of what sort of connection with the jurisdiction the parties to litigation there should have. It can be difficult to achieve a genuinely collective outcome as between all the creditors where the assets are widely dispersed between jurisdictions in which insolvency proceedings take effect at differing times, if at all, so that creditors in some jurisdictions are able to continue individual actions. The insolvency laws of the various jurisdictions differ considerably both in matters of principle and matters of detail so that the outcome for any particular creditor may be significantly different depending upon which set of rules determines his or her claim. There can be huge difficulties in deciding who should control the proceedings and what rules should be applied. A couple of examples from recent global insolvencies serve to demonstrate the nature of the issues which may arise.