Book contents
- Frontmatter
- Contents
- Preface to the Third Edition
- Preface to the Second Edition
- Preface to the First Edition
- PART ONE AN INTRODUCTION TO PROJECT FINANCE
- PART TWO RISK IDENTIFICATION, ALLOCATION, AND MITIGATION
- PART THREE PROJECT FINANCE STRUCTURES
- PART FOUR TECHNICAL, POLITICAL, AND ECONOMIC FEASIBILITY
- PART FIVE PROJECT FINANCE DOCUMENTATION
- PART SIX CREDIT ENHANCEMENT
- PART SEVEN DEBT AND EQUITY FINANCING
- PART EIGHT COLLATERAL
- PART NINE PROJECT SPONSOR AND INVESTOR AGREEMENTS
- PART TEN SPECIAL TOPICS IN PROJECT FINANCE
- CHAPTER TWENTY-EIGHT BANKRUPTCY
- CHAPTER TWENTY-NINE UNITED STATES LAWS AFFECTING FOREIGN INVESTMENTS
- CHAPTER THIRTY LOCAL LAWYERS AND OVERVIEW OF LOCAL LAWS
- CHAPTER THIRTY-ONE DISPUTE RESOLUTION IN PROJECT FINANCE TRANSACTIONS
- CHAPTER THIRTY-TWO MULTILATERAL AGENCY PROHIBITIONS ON ANTI-COMPETITIVE ACTIVITY
- CHAPTER THIRTY-THREE MERCHANT FACILITIES – PROJECT FINANCE WITHOUT CONTRACTUALLY ASSURED REVENUE FLOWS
- Appendix A A Checklist of Due Diligence Considerations for a Project Financing
- Appendix B UNCITRAL Legislative Guide on Privately Financed Infrastructure Projects
- Project Finance Terms, Abbreviations, and Acronyms
- Select Bibliography
- Index
CHAPTER TWENTY-EIGHT - BANKRUPTCY
from PART TEN - SPECIAL TOPICS IN PROJECT FINANCE
Published online by Cambridge University Press: 05 June 2012
- Frontmatter
- Contents
- Preface to the Third Edition
- Preface to the Second Edition
- Preface to the First Edition
- PART ONE AN INTRODUCTION TO PROJECT FINANCE
- PART TWO RISK IDENTIFICATION, ALLOCATION, AND MITIGATION
- PART THREE PROJECT FINANCE STRUCTURES
- PART FOUR TECHNICAL, POLITICAL, AND ECONOMIC FEASIBILITY
- PART FIVE PROJECT FINANCE DOCUMENTATION
- PART SIX CREDIT ENHANCEMENT
- PART SEVEN DEBT AND EQUITY FINANCING
- PART EIGHT COLLATERAL
- PART NINE PROJECT SPONSOR AND INVESTOR AGREEMENTS
- PART TEN SPECIAL TOPICS IN PROJECT FINANCE
- CHAPTER TWENTY-EIGHT BANKRUPTCY
- CHAPTER TWENTY-NINE UNITED STATES LAWS AFFECTING FOREIGN INVESTMENTS
- CHAPTER THIRTY LOCAL LAWYERS AND OVERVIEW OF LOCAL LAWS
- CHAPTER THIRTY-ONE DISPUTE RESOLUTION IN PROJECT FINANCE TRANSACTIONS
- CHAPTER THIRTY-TWO MULTILATERAL AGENCY PROHIBITIONS ON ANTI-COMPETITIVE ACTIVITY
- CHAPTER THIRTY-THREE MERCHANT FACILITIES – PROJECT FINANCE WITHOUT CONTRACTUALLY ASSURED REVENUE FLOWS
- Appendix A A Checklist of Due Diligence Considerations for a Project Financing
- Appendix B UNCITRAL Legislative Guide on Privately Financed Infrastructure Projects
- Project Finance Terms, Abbreviations, and Acronyms
- Select Bibliography
- Index
Summary
INTRODUCTION
Bankruptcy of a project participant with assets in the United States and another country or bankruptcy of a project participant with assets only in a host country presents a complicated risk for creditors. The risk includes the availability of ancillary proceedings in other countries and whether other countries recognize another country's bankruptcy proceeding. Unfortunately, there is no universal bankruptcy code.
For international projects, bankruptcy reorganization in the sense common in the United States is not generally available. This is because one jurisdiction cannot typically assert overall control of the project's reorganization.
TYPES
Two general theories of bankruptcy protection when a debtor's creditors, assets, or both are located in another country are universal and territorial. An understanding of these theories assists in an understanding of the risks in transnational project finance.
Universal
Countries that base their bankruptcy laws on a universal approach embrace the theory that the law of the country in which the bankruptcy is pending should be paramount. All of the debtor's creditors would therefore be required to participate in one proceeding. That proceeding's determinations are considered to have international effect.
Territorial
At the other extreme, countries that embrace the territorial theory consider bankruptcy law to apply only within the borders of a country. Therefore, a debtor with multinational operations would pursue bankruptcy proceedings in several countries. The bankruptcy decisions rendered in other countries concerning the same debtor would not be applied.
- Type
- Chapter
- Information
- The Law and Business of International Project FinanceA Resource for Governments, Sponsors, Lawyers, and Project Participants, pp. 389 - 391Publisher: Cambridge University PressPrint publication year: 2007
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