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BANKRUPTCY FORUM SHOPPING: THE UK AND US AS VENUES OF CHOICE FOR FOREIGN COMPANIES

Published online by Cambridge University Press:  23 September 2014

Gerard McCormack
Gerard McCormack*
Affiliation:
Director of the Centre for Business Law and Practice, University of Leeds, [email protected].
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Abstract

This paper critically evaluates ‘forum shopping’ possibilities offered by the UK and US in bankruptcy/insolvency cases. While recognizing that in some quarters forum shopping has a bad name, the paper makes the point that strategic manoeuvring and transaction planning is what litigation and case management is all about. Certain countries are popular as forum shopping venues because of substantive law or the procedural advantages brought about by litigating in that country. The paper concludes that while the UK may have shut its doors too firmly against foreign forum shoppers, the US is too much a safe haven. The paper calls for a measure of jurisdictional restraint through raising entry barriers. While a bit of jurisdictional competition in insolvency law-making may be no bad thing, the US approach runs the risk of undermining important policies considered important by other countries such as the protection of employees and the public purse. It is also asymmetrical in that US bankruptcy jurisdiction is assumed in situations where, if foreign countries had acted on a similar basis, US recognition of the foreign proceedings would be denied.

Keywords

comparative lawforum shoppinginternational insolvencyUnited KingdomUnited States
Type
Articles
Information
International & Comparative Law Quarterly , Volume 63 , Issue 4 , October 2014 , pp. 815 - 842
Copyright
Copyright © British Institute of International and Comparative Law 2014 

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References

1 See the European Insolvency Regulation: Reg 1346/2000 recital 4 of the preamble.

2 See generally Bell, AC, Forum Shopping and Venue in Transnational Litigation (OUP 2003)Google Scholar which argues that so long as different forums provide for the possibility of different outcomes in the resolution of any given dispute, litigation about where to litigate is inevitable. This book ‘examines the fascinating competition to win the battle for venue in transnational litigation’.

3 In this paper the expressions ‘bankruptcy’ and ‘insolvency’ and their affiliates are used interchangeably.

4 See generally Szydlo, M, ‘Prevention of Forum Shopping in European Insolvency Law’ (2010) 11 EBOR 253Google Scholar; Ringe, W-G, ‘Forum Shopping under the EU Insolvency Regulation’ (2008) 9 EBOR 579Google Scholar; McCormack, G, ‘Jurisdictional Competition and Forum Shopping in Insolvency Proceedings’ (2009) 68 CLJ 213CrossRefGoogle Scholar.

5 Cambridge Gas Transport Corporation v Official Committee of Unsecured Creditors (of Navigator Holdings Plc [2006] UKPC 26; [2007] 1 AC 508 at paras 14–15.

6 For ‘creditors’ bargain’ and ‘procedural’ approaches towards bankruptcy law see Jackson, TH, The Logic and Limits of Bankruptcy Law (Harvard University Press 1986)Google Scholar and Mooney, CW, ‘A Normative Theory of Bankruptcy Law: Bankruptcy As (Is) Civil Procedure’ (2004) 61 Wash&LeeLRev 931Google Scholar.

7 See generally Finch, V, ‘The Measures of Insolvency Law’ (1997) 17 OJLS 227CrossRefGoogle Scholar; Keay, A, ‘Insolvency Law: A Matter of Public Interest?’ (2000) 51 NILQ 509Google Scholar and for a rights-oriented perspective see Mokal, RJ, ‘The Authentic Consent Model: Contractarianism, Creditors’ Bargain and Corporate Liquidation’ (2001) 21 LS 400Google Scholar. See also Korobkin, D, ‘Rehabilitating Values: A Jurisprudence of Bankruptcy’ (1991) 91 ColumLRev 717Google Scholar; Lopucki, L, ‘A Team Production Theory of Bankruptcy Reorganization’ (2004) 57 VandLRev 741Google Scholar.

8 See generally Warren, E, ‘Bankruptcy Policymaking in an Imperfect World’ (1993) 92 MichLRev 336Google Scholar.

9 See Paulus, C, ‘Global Insolvency Law and the Role of Multinational Institutions’ (2007) 32 BrooklynJIntlL 755Google Scholar; Block-Lieb, S and Halliday, T, ‘Harmonization and Modernization in UNCITRAL's Legislative Guide on Insolvency Law’ (2007) 42 TexIntlLJ 481Google Scholar and also Halliday, T ‘Legitimacy, Technology, and Leverage: The Building Blocks of Insolvency Architecture in the Decade Past and the Decade Ahead’ (2006) 32 BrooklynJIntlL 1081Google Scholar.

10 See ‘Proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1346/2000 on insolvency proceedings’ COM(2012) 744 final at 3. For a critical overview see Eidenmuller, H, ‘A New Framework for Business Restructuring in Europe: The EU Commission's Proposals for a Reform of the European Insolvency Regulation and Beyond’ (2013) 20 MJ 133Google Scholar.

11 On different conceptions of corporate rescue see Finch, V, ‘Corporate Rescue: A Game of Three Halves’ (2012) 32 LS 302Google Scholar; ‘Corporate Rescue in a World of Debt’ (2008) JBL 756.

12 Section 365 US Bankruptcy Code and see generally Fried, J, ‘Executory Contracts and Performance Decisions in Bankruptcy’ (1997) 46 DukeLJ 517Google Scholar; Triantis, G, ‘The Effects of Insolvency and Bankruptcy on Contract Performance and Adjustment’ (1993) 43 UTLJ 679CrossRefGoogle Scholar; Westbrook, JL, ‘A Functional Analysis of Executory Contracts’ (1989) 74 MinnLRev 227Google Scholar.

13 Enterprise and Regulatory Reform Act 2013 sections 92 and 93. See generally the campaign by R3, the Association of Business Recovery Professionals, for reform of section 233 <http://www.r3.org.uk/media/documents/policy/policy_papers/corporate_insolvency/Holding_rescue_to_ransom.pdf>.

14 Regulation 1346/2000.

15 It provides that the ‘opening of insolvency proceedings shall not affect the rights in rem of creditors’ in respect of assets that are situated in a State other than the State of the opening of the insolvency proceedings. See generally Smart, P, ‘Rights In Rem, Article 5 and the EC’ (2006) 15 IIR 18Google Scholar; Clark, L and Goldstein, K, ‘Sacred Cows: How to Care for Secured Creditors’ Rights in Cross-Border Bankruptcies’ (2011) 46 TexIntlLJ 513Google Scholar.

16 See generally McCormack, G, ‘Conflicts, Avoidance and International Insolvency 20 years On: A triple Cocktail’ (2013) JBL 141Google Scholar.

17 See Powdrill v Watson [1995] 2 AC 394 and generally Deakin, S and Koukiadaki, A, ‘Capability Theory, Employee Voice, and Corporate Restructuring: Evidence from UK Case Studies’ (2012) 33 CompLabL&PolyJ 427Google Scholar; Armour, J and Deakin, S, ‘Insolvency and Employment Protection: The Mixed Effects of the Acquired Rights Directive’ (2003) 22 IntlRevL&Econ 443Google Scholar.

18 2013] UKSC 52.

19 [2013] SCC 6.

20 Enterprise Act 2002 section 251 and see generally Keay, A and Walton, P, ‘Preferential Debts: An Empirical Study’ (1999) 3 InsolvL 112Google Scholar; and ‘The Preferential Debts Regime in Liquidation Law: In the Public Interest?’ (1999) 3 CfiLR 84.

21 [2001] Ch 475. But for a different view in Scotland see Re Scottish Coal Co Ltd [2013] CSIH 108.

22 Newfoundland and Labrador v AbitibiBowater Inc [2012] SCC 67.

23 See generally Kahn-Freund, O, ‘On Uses and Misuses of Comparative Law’ (1974) 37 MLR 1CrossRefGoogle Scholar.

24 Chan, SK, ‘Cross-Border Insolvency issues affecting Singapore’ (2011) 23 SAcLJ 413Google Scholar, 419.

25 Cambridge Gas Transport Corporation v Official Committee of Unsecured Creditors (of Navigator Holdings Plc) [2007] 1 AC 508 at 516. See also Re HIH Casualty and General Insurance Ltd [2008] 1 WLR 852 and generally McCormack, G, ‘Universalism in Insolvency Proceedings and the Common Law’ (2012) OJLS 1Google Scholar.

26 But a single forum does not necessarily resolve issues about choice of law; on which see Buxbaum, H, ‘Rethinking International Insolvency: The Neglected Role of Choice-of-Law Rules and Theory’ (2000) 36 StanJIntl 23Google Scholar; Westbrook, JL, ‘Theory and Pragmatism in Global Insolvencies: Choice of Law and Choice of Forum’ (1991) 65 AmBankrLJ 457Google Scholar.

27 See In re Board of Directors of Multicanal SA (2004) 314 BR 486 at 521; In re Treco (2001) 240 F 3d at 154.

28 See the comments of Lord Hoffmann in Re HIH Insurance [2008] 1 WLR 852 at para 31.

29 Regulation 1346/2000 art 3(1). For guidance from the European court on ‘COMI’ see Case C-341/04 Re Eurofood IFSC Ltd [2006] ECR 1-03813 and the more recent Interedil Case C-396/09 [2011] BPIR 1639 and Mediasucre Case C-191/10; OJ 2012 C39/3 cases.

30 Art 3(2).

31 See the definition in art 2(h) and also Interedil Case C-396/09 [2011] BPIR 1639.

32 Recital 4 of the preamble.

33 The Model Law (1997) is available at the United Nations Commission on International Trade Law (UNCITRAL) website <www.uncitral.org/>. See also Berends, A, ‘UNCITRAL Model Law on Cross-Border Insolvency: A Comprehensive Overview’ (1998) 6 TulJIntl&CompL 309Google Scholar; Clift, J, ‘The UNCITRAL Model Law on Cross-Border Insolvency: A Legislative Framework to Facilitate Coordination and Cooperation’ (2004) 12 TulJIntl&CompL 307Google Scholar.

34 Cross-Border Insolvency Regulations 2006, SI 2006/1030 sch 1, art 20(5) in the UK and section 1520(c) Bankruptcy Code in the US.

35 See Westbrook, JL, ‘Chapter 15 at Last’ (2005) 79 AmBankrLJ 713Google Scholar.

36 See LoPucki, LM, ‘Global and Out of Control?’ (2005) 79 AmBankrLJ 79Google Scholar; LoPucki, LM, ‘Universalism Unravels’ (2005) 79 AmBankrLJ 143Google Scholar and generally Pottow, J, ‘The Myths (and Realities) of Forum Shopping in Transnational Insolvency’ (2007) 32 BrooklynJIntlL 785Google Scholar.

37 See the comments of Lord Simon in the The Atlantic Star [1974] AC 436 at 471 that “‘Forum-shopping” is a dirty word’.

38 For references to inappropriate forum shopping see the comments of Andrew Smith J in Citigroup Global Markets Ltd v Amatra [2012] EWHC 1331 at para 38 and see also the decision of the US Supreme Court in Morrison v National Australia Bank rejecting the use of US securities laws by foreign plaintiffs.

39 See the opinion of Advocate General Colomer in Staubitz-Schreiber Case C-1/04 [2006] ECR I-701 at paras 71, 72.

40 Owners of the Atlantic Star v Owners of the Bona Spes (The Atlantic Star and The Bona Spes) [1974] AC 436 at 461.

41 ibid at 471. For the more controversial comments of Lord Denning in the Court of Appeal see [1973] QB 364 at 381–382.

42 Keeton v Hustler Magazine (1984) 465 US 770 at 779.

43 Wright, JS, ‘The Federal Courts and the Nature and Quality of State Law’ (1967) 13 WayneLR 317Google Scholar, 333. See generally Jeunger, F, ‘What's Wrong with Forum Shopping’ (1994) 16 SydLR 5Google Scholar.

44 28 USC 1408.

45 Art 1, section 8, cl 4 of the US Constitution.

46 For a full-blooded critique of bankruptcy forum shopping in the US see LoPucki, LM, Courting Failure: How Competition for Big Cases Is Corrupting the Bankruptcy Courts (University of Michigan Press 2005)CrossRefGoogle Scholar but for rebuttals of the LoPucki thesis see Jakoby, MB, ‘Fast, Cheap, and Creditor-Controlled: Is Corporate Reorganization Failing?’ (2006) 54 BuffLRev 401Google Scholar and also Ayotte, K and Skeel, D, ‘An Efficiency-Based Explanation for Current Corporate Reorganization Practice’ (2006) 73 UChiLRev 425Google Scholar.

47 See UCLA-LoPucki Bankruptcy Research Database <http://lopucki.law.ucla.edu/tables_and_graphs/Forum_shopping_rate.pdf>.

48 See Parikh, S, ‘Modern Forum Shopping in Bankruptcy’ (2013) 46 ConnLRev 28Google Scholar.

49 HR 2533. For a copy of the bill and US Congressional testimony see <http://judiciary.house.gov/hearings/printers/112th/112-88_68185.PDF>.

50 See J Biden, ‘Give Credit to Good Courts’ Legal Times 20 June 2005: ‘One of the states … singled out for criticism is my state of Delaware, a jurisdiction widely respected for the quality, efficiency, expertise, and fairness of its bankruptcy courts.’

51 For the basic argument about forum shopping in a municipal context see Tiebout, C, ‘A Pure Theory of Local Expenditures’ (1956) 64 JPolEcon 416Google Scholar.

52 See generally Ogus, A, ‘Competition between National Legal Systems: A Contribution of Economic Analysis to Comparative Law’ (1999) 48 ICLQ 405CrossRefGoogle Scholar; Easterbrook, F, ‘Federalism and European Business Law’ (1994) 14 IntlRevL&Econ 125Google Scholar.

53 Hobhouse, J, ‘International Conventions and Commercial Law: In Pursuit of Uniformity’ (1990) 106 LQR 530Google Scholar, 535.

54 See generally Finch, V, ‘The Measures of Insolvency Law’ (1997) 17 OJLS 227CrossRefGoogle Scholar.

55 Re Yukos Oil Co (2005) 321 BR 396. See the discussion of the case in notes 117–120 below. For some consideration of the merits of the tax demands see the judgment of the European Court of Human Rights in Yukos v Russia (2012) 54 EHRR 19.

56 For details on schemes see Pt 26 of the UK Companies Act 2006 and see generally on schemes O'Dea, G, Long, J and Smyth, A, Schemes of Arrangement Law and Practice (OUP 2012)Google Scholar.

57 Sections 234–236 Insolvency Act.

58 Section 238, 239, 244, 245 and 423 Insolvency Act.

59 Section 214 Insolvency Act.

60 An administrator, however, is not entitled to bring wrongful trading proceedings.

61 For the distinction between the procedures see generally Re MF Global UK Ltd [2012] EWHC 3068; [2013] 1 WLR 903 where David Richards J said at para 52 that the ‘sole purpose of a liquidation is the realisation of assets and the distribution of assets amongst creditors. Save in limited circumstances and then only for a limited time, the business of the company will cease upon the appointment of a liquidator. This distinguishes liquidation from the numerous other insolvency proceedings … including in particular administration. An administration and other insolvency proceedings may result in the realisation of a company's assets and a distribution of the proceeds among creditors, but the alternative of a rescue of the company as a going concern is at least one of the purposes or objectives of those proceedings.’

62 Sch B1 Insolvency Act 1986 para 3(1).

63 For statistical information on the use of insolvency procedures see the UK Insolvency Service website <www.insolvency.gov.uk>.

64 A CVA proposal may not, however, affect the right of a secured creditor of the company to enforce his security, except with the concurrence of the creditor concerned—see section 4(3) Insolvency Act 1986 and para 73(1) sch B1 for a similar provision in respect of proposals by an administrator.

65 See Insolvency Act section 130(2) and sch B1, paras 43, 44.

66 See Mazur Media Ltd v Mazur Media GmbH [2004] 1 WLR 2966 and Bloom v Harms Offshore AHT [2010] Ch 187.

67 Re Vocalion (Foreign) Ltd [1932] 2 Ch 196—but where an injunction was refused see Kemsley v Barclays Bank [2013] EWHC 1274.

68 BlueCrest Mercantile BV v Vietnam Shipbuilding Industry Group [2013] EWHC 1146.

69 See Primacom Holdings GmbH v Credit Agricole [2011] EWHC 3746; Re Rodenstock GmbH [2011] EWHC 1104; [2011] WLR (D) 150. See also Re Drax Holdings Ltd [2004] 1 WLR 1049 for the use of schemes of arrangement in the restructuring of insurance companies. See generally Payne, J, ‘Cross-Border Schemes of Arrangement and Forum Shopping’ (2013) 14 EBOR 563Google Scholar.

70 See generally I Darke, ‘Use of US Chapter 11 Filings by Non-US Corporations; Realistic Option of Non-Starter’ [2011] International Corporate Rescue 206. The merits of Chapter 11 are considered in Warren, E and Westbrook, JL, ‘The Success of Chapter 11: A Challenge to the Critics’ (2009) 107 MichLRev 603Google Scholar. The American Bankruptcy Institute has established a commission to review Chapter 11 with a view to advancing proposals for legislative reform—see <www.commission.abi.org>.

71 Bank of America v 203 North LaSalle Street Partnership (1999) 526 US 434.

72 US v Whiting Pools Inc (1983) 462 US 198 at 203. See also HR Rep No 595, 95th Congress, 1st Sess 220 (1977).

73 See Warren, E and Westbrook, JL, ‘The Success of Chapter 11: A Challenge to the Critics’ (2009) 107 MichLRev 603Google Scholar, 604.

74 For a recent example see In re Nortel Networks Inc (2011) 669 F 3d 128.

75 See Nakash v Zur (In re Nakash) (1996) 190 BR 763 where the automatic stay was enforced against a foreign receiver in respect of the foreign assets of a foreign debtor.

76 See Hong Kong & Shanghai Banking Corp v Simon (In re Simon) (1998) 153 F 3d 991 at 996: ‘Congress intended extraterritorial application of the Bankruptcy Code as it applies to property of the estate.’

77 On this general issue of the relative merits of debtor-in-possession restructuring regimes see Hahn, D, ‘Concentrated Ownership and Control of Corporate Reorganisations’ (2004) 4 JCLS 117Google Scholar; McCormack, G, ‘Control and Corporate Rescue: An Anglo-American Evaluation’ (2007) 56 ICLQ 515CrossRefGoogle Scholar.

78 Section 1104 of the US Bankruptcy Code.

79 See Ayotte, K and Morrison, E, ‘Creditor Control and Conflict in Chapter 11’ (2009) 1 JLegalAnal 511Google Scholar who find ‘pervasive creditor control’.

80 See eg Ayotte, K and Skeel, DA, ‘Bankruptcy or Bailouts’ (2010) 35 JCorpL 469Google Scholar, 477: ‘roughly two-thirds of all large bankruptcy outcomes involve a sale of the firm, rather than a traditional negotiated reorganization in which debt is converted to equity through the reorganization plan’.

81 For different perspectives on these cases see Baird, D, ‘Lessons from The Automobile Reorganizations’ (2012) 4 JLegalAnal 271Google Scholar; Lubben, S, ‘No Big Deal: The GM and Chrysler Cases in Context’ (2009) 82 AmBankrLJ 531Google Scholar; Roe, M and Skeel, D, ‘Assessing the Chrysler Bankruptcy’ (2010) 108 MichLRev 727Google Scholar.

82 See section 1129 of the Bankruptcy Code on the conditions for getting a restructuring plan approved.

83 See Regulation 1346/2000 recital 14 of the preamble.

84 Banco Nacional de Cuba v Cosmos Trading Corp [2000] BCC 910.

85 [1951] Ch 112 at 125–126.

86 [2011] EWHC 1104.

87 Briggs J referred at para 21 to Knox J in Re Real Estate Development Co [1991] BCLC 210 at 217, Re Latreefers Inc [2001] BCC 174 per Lloyd J at 180 and Re Drax Holdings Ltd [2004] 1 WLR 1049 at 1054 per Lawrence Collins J.

88 Re Paramount Airways Ltd (No 2) [1993] Ch 223. For the extraterritorial application of the wrongful trading provision in section 213 Insolvency Act see Bilta (UK) Ltd v Nazir [2013] EWCA Civ 968.

89 [2004] 1 WLR 1049.

90 See Re Demaglass Holdings Ltd [2001] 2 BCLC 633.

91 Re St Thomas's Dock Co (1876) 2 Ch D 116; Re Crigglestone Coal Co Ltd [1906] 2 Ch 327. See section 195 which provides for the holding of meetings to ascertain the wishes of creditors on matters relating to the winding up of the company.

92 [1991] BCLC 210 at 217.

93 In Re Latreefers Inc; Stocznia Gdanska SA v Latreefers Inc [2001] BCC 174 at 182 Lloyd J spoke, however, of the last factor as ‘puzzling’ in practice: ‘The petitioning creditor will always have invoked the jurisdiction and therefore be subject to it in some sense.’

94 [2004] 1 WLR 1049.

95 [2011] EWHC 1104; [2012] BCC 459. See also on the jurisdiction to sanction schemes Primacom Holdings GmbH v Credit Agricole [2013] BCC 201 and Re Seat Pagine Gialle SpA [2012] EWHC 3686.

96 See generally Chan Ho, L, ‘Making and Enforcing International Schemes of Arrangement” (2011) 26 JIBLR 434Google Scholar.

97 [1973] Ch 75.

98 For a statement of principles see [1973] Ch 75 at 91–92.

99 [2008] EWHC 2614 at para 58.

100 This was a factor in Re A Company (No 3102 of 1991), ex parte Nyckeln Finance Co Ltd [1991] BCLC 539 and see also Re Mid East Trading Ltd [1998] 1 BCLC 240.

101 See the Okeanos Maritime Corp case; Re a Company No 00359 of 1987 [1988] Ch 210. A sufficiently close connection was also held to exist because the loan agreement on which the company had defaulted was governed by English law, was to be performed in England and the company had carried on business in England.

102 Re Eloc Electro-Optieck and Communicatie BV [1982] Ch 43.

103 Re Yugraneft [2008] EWHC 2614; [2008] All ER (D) 311.

104 [1988] Ch 210.

105 See the comments of Mann J in Trillium (Nelson) Properties Ltd v Office Metro Ltd [2012] BCC 829 at paras 34–36 and generally Dawson, K, ‘The Doctrine of Forum Non Conveniens and the Winding up of Insolvent Foreign Companies’ (2005) JBL 28Google Scholar.

106 [1992] Ch 72. See, however, the comments of Briggs J in Re Rodenstock GmbH [2011] EWHC 1104 at [24] on the effect of the European court decision in Owusu v Jackson (C-291/02) [2005] QB 801 on Re Harrods (Buenos Aires) Ltd: ‘because the company was incorporated in the UK, the UK courts had jurisdiction to wind up the company under Art 22(2) of the Jurisdiction and Judgments regulation – regulation 44/2001 – and this jurisdiction could not be declined. According to Owusu at para 41: ‘Application of the forum non conveniens doctrine, which allows the court seised a wide discretion as regards the question whether a foreign court would be a more appropriate forum for the trial of an action, is liable to undermine the predictability of the rules of jurisdiction … and consequently to undermine the principle of legal certainty’.

107 [2000] BCC 910. See also Re Latreefers Inc [2001] BCC 174.

108 Insolvency Act 1986 (Amendment) Regulations 2005 SI No 2005/879. See generally G Moss, ‘Salvage Sunk’ (2005) 18 InsolvInt 92. The jurisdiction in respect of CVAs is limited in the same way—see now section 1(4) Insolvency Act 1986 as amended.

109 See sch B1 Insolvency Act 1986 para 3(1).

110 See S Shandro and B Jones, ‘Bankruptcy jurisdiction in the US and Europe: reconsideration needed!’ (2005) 18 InsolvInt 129, 131. Also generally E Healy, ‘All's Fair in Love and Bankruptcy? Analysis of the Property Requirement for Section 109 Eligibility and Its Effect on Foreign Debtors Filing in US Bankruptcy Courts’ (2004) 12 AmBankrInstLRev 535.

111 In re Carnera (1933) 6 F Supp 267.

112 Section 2(a)(1) of the Bankruptcy Act 1898 gave the courts of bankruptcy the authority to adjudge persons bankrupt who ‘do not have their principal place of business, reside, or have their domicile within the United States, but have property within [the courts'] jurisdiction’. The district court in In re Berthoud, (1918) 231 F 529 at 532 noted that, ‘residence or domicile or the locus of the principal place of business is immaterial if there is property within the United States’.

113 (1996) 198 BR 428. See also the statement in In re Globo Communicacoes E Participacoes SA (2004) 317 BR 235 at 249 that ‘courts have required only nominal amounts of property to be located in the United States, and have noted that there is “virtually no formal barrier” to having federal courts adjudicate foreign debtors' bankruptcy proceedings'.

114 See In re Head (1998) 223 BR 648 where the links with the US were quite slight and the foreign debtors were attempting to circumvent contractual liability to a UK based creditor—Lloyds of London.

115 See Hong Kong & Shanghai Banking Corp Ltd v Simon (1996) 153 F.3d 991 at 996.

116 (1996) 190 BR 763. In this case, the automatic stay was enforced against the foreign receiver of foreign assets of a foreign debtor. The stay was described (at 768) as existing to protect the estate from ‘a chaotic and uncontrolled scramble for the Debtor's assets in a variety of uncoordinated proceedings in different courts’. The stay also served to protect and preserve the estate for the benefit of all creditors and the jurisdiction of the bankruptcy court so that the court could administer the debtor's estate in an orderly fashion.

117 See Nakash v Zur (In re Nakash) (1996) 190 BR 763 at 767.

118 (2003) 294 BR 571.

119 See LoPucki (n 46) 191.

120 (2003) 294 BR 571 at 584.

121 In re Marco Polo Seatrade BV, No 11-13634; ruling of Judge Peck US Bankruptcy Court SDNY, 21 October 2011 and for a discussion see J Canfield et al., ‘How Low Can You Go? Minimum Jurisdictional Threshold For US Bankruptcy Courts in Cross-Border Insolvency Cases’ ABI Committee News, March 2012.

122 Applying In re Global Ocean Carriers Ltd (2000) 251 BR 31.

123 Re Yukos Oil Co (2005) 321 BR 396. See also In re Board of Directors of Multicanal SA (2004) 314 BR 486.

124 (2005) 321 BR 396 at 410.

125 ibid at 407–408.

126 ibid at 411.

127 Re Aerovias Nacionales de Colombia SA Avianca (2004) 303 BR 1.

128 The court (303 BR 1 at 12) noted that there was no foreign proceeding pending: ‘Moreover, it would be unwarranted to impose an obligation on Avianca to file a proceeding in its “home” court, or to assume that if such a proceeding were filed it would justify suspension or dismissal of the U.S. case.’

129 ibid at 12–13.

130 ibid at 18.

131 See Hoogland, M, ‘Recent Trends in International Chapter 11 Cases: Pragmatic Reorganizations’ (2006) 41 TexIntlLJ 145Google Scholar, 166: ‘Avianca allowed a Colombian airline to circumvent Colombian policy completely … Avianca … is dangerously close to imperialism’.

132 (2004) In re Avianca 303 BR at 14.

133 See generally Re Kmart (2004) 359 F 3d 866.

134 See Westbrook, JL, ‘Multinational Enterprises in General Default: Chapter 15, The ALI Principles and The EU Insolvency Regulation’ (2002) 76 AmBankrLJ 1Google Scholar; LoPucki, LM, ‘Cooperation in International Bankruptcy: A Post-Universalist Approach’ (1999) 84 CornellLRev 696Google Scholar; Mevorach, I, ‘On the Road to Universalism’ (2011) EBOR 517Google Scholar; McCormack, G, ‘COMI and comity in UK and US Insolvency Law’ (2012) 128 LQR 140Google Scholar.

135 Art 20.

136 Arts 20(6) and 21.

137 SI No 1030/2006.

138 Cross-Border Insolvency Regulations 2006, sch 1, art 28.

139 See para 158 Insolvency Service, Implementation of UNCITRAL Model Law on Cross-Border Insolvency in Great Britain: Response to Consultation (2006) and also Fletcher, I, Insolvency in Private International Law (2nd edn, OUP 2005) 153–210Google Scholar.

140 (2003) 294 BR 571.

141 See Re BRAC Rent-A-Car International Inc [2003] 1 WLR 1421. For the exclusion of Denmark see para 33 of the preamble to the Insolvency Regulation Reg 1346/2000 and also Re Arena Corporation Ltd [2004] BPIR 375. Re Tambrook Jersey Ltd [2013] EWCA Civ 576; [2013] BCC 472 confirms that English courts may make an administration order in respect of a foreign-registered company under section 426 Insolvency Act 1986. This section enables English courts to give assistance to foreign courts in designated countries having jurisdiction in respect of insolvency matters. In practice only a small number of largely Commonwealth, countries have been designated under section 426.