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Transnational Bankruptcy Extraterritorial Study

Posted on:2008-07-16Degree:MasterType:Thesis
Country:ChinaCandidate:Y XiaoFull Text:PDF
GTID:2206360215472893Subject:International Law
Abstract/Summary:PDF Full Text Request
The cross-border effects of cross-border insolvency is dealing with whether thetrustee can administrate and control the property situated in a foreign countrybelonging to the debtor, whether the estate of property includes the propertysituated in a foreign country which belongs to the debtor when a cross-borderbankrupt proceeding is opened.This article focuses on discussing the cross-border effects of cross-borderinsolvency. It has four main parts.In the first part, the writer studies the two traditional theories, universalism andterritorialism and two developed theories, modified universalism and modernterritorialism. According to the universalism, one single forum controlsadministration and distribution of the debtor's assets, wherever located. In aterritorial system, the power of bankruptcy courts to administer the assets of thedebtor is restricted to the assets located within the territories of their jurisdiction.The writer then compares the two theories in three aspects and asserts thatalthough the universalism gains the widespread academic support for its higherex ante predictability to creditors, the territorialism still persists as the dominantapproach to cross-border insolvency because of the differences betweenbankruptcy laws of different countries. The modified universalism combines theadvantage of the traditional universalism and territorialism. Adopted by someinternational documents and some nations' bankruptcy laws, the modifieduniversalism prevails in these days. The modern territorialism is limited to theinsolvency of foreign financial firms.In the second part, the writer studies the rules concerning the cross-border effectsof cross-border insolvency in some international documents, including theUNCITRAL Model Law on Cross-Border Insolvency, UNCITRAL LegislativeGuide on Insolvency Law and 2000/1346 EC. Then the writer concludes:Neither the international documents, nor the territorial documents adopt thetraditional universalism and territorialism. What they prefer is modified universalism. The basic model is proposing universalism on the one hand andadmitting territorialism to limit the effects of universalism on the other hand. Thisleads equal treatments to all creditors, and effective protections to the nativecreditors at the same time.In the third part, the writer studies the attitudes towards the cross-border effects ofcross-border insolvency of several typical countries, including USA, Japan,Canada, UK, Germany and France, and concludes that in order to accelerate thecooperation in the cross-border insolvency area, meanwhile protect profits ofnative creditors, all of the countries adopt modified universalism by differentmeans. Today, adopting modified universalism is the main stream in makingcross-border bankruptcy laws.In the fourth part, the writer studies the bankruptcy laws of China, and finds thatno rules are about the cross-border effects of cross-border insolvency in China.But actually, the courts have dealt with the claims using universalism orterritorialism. Territorialism is more often basing on that it can protect the interestof the native creditors and native economic order. Then, the writer suggests thatour China should reinforce the legislation on the cross-border insolvency. Themodified universalism is ideal to be adopted in lawmaking. Furthermore, wemay concern the free-choice regime and take part in the action of makingbilateral and multilateral treatments.In the end, the writer concludes that: the modified universality is increasinglycommon and is the animating principle of the cross-border insolvent proceedingsof most countries' prevail law and international cross-border insolventdocuments. China should conform the main stream and adopt modifieduniversalism. Furthermore, Free-choice regime may be applied properly. Chinashould make efforts in protecting interests of native creditors and nation,promoting international cooperation and accelerating the developments of localeconomy and global economy.
Keywords/Search Tags:Insolvency, Cross-border Insolvency, Cross-border Effects
PDF Full Text Request
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