THIS MONTH the Supreme Court will hear the joined appeals in two cases - New Cap Re and Rubin - with the judgment expected to have far-reaching implications on the ability of insolvency practitioners around the world to conduct cases under a universally recognised process.
Crossing borders today
In the current market, few companies are based within the borders of a single country's jurisdiction, with globalisation transforming the way business is done.
A company of a certain size is likely to have assets and/or creditors outside of the country in which it is 'domiciled' (that is, where it has its principal place of business) and will have contracts with and make payments to, parties in other jurisdictions.
If such a company were to enter an insolvency proceeding, issues likely to arise include whether the assets in other jurisdictions can be collected in and distributed through a single insolvency process, or if there should be several in each country where there are assets or outstanding payments, also how should creditors outside that area be treated?
There have been important developments in cross-border insolvency law over the last 20 years which seek to answer such issues including: the introduction of European Commission legislation for countries within the EC on how administrators should deal with insolvencies across EC borders; and the drafting of a "model law" for countries to adopt, set up by the United Nations (UNICITRAL).
Read more: http://www.accountancyage.com/aa/feature/2174924/supreme-court-shines-light-cross-border-insolvency#ixzz2CIchX5LG
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