International Insolvency Review最新文献

Local governments have played a pivotal role in China's rapid economic growth, yet they have simultaneously faced unique financial pressures. The demands on local governments have increased significantly due to urbanisation and migration from rural areas, necessitating expanded services and infrastructure. Central government policies aimed at stimulating the economy after the 2008 financial crisis further intensified these demands by mandating extensive infrastructure projects, often on only a partially funded basis. However, state budgetary constraints have severely limited the financial flexibility of local governments. To navigate these restrictions, local governments turned to off-balance-sheet local government financing vehicles (LGFVs) to fund infrastructure projects, often of a long-term nature and with low returns, and deliver essential services. In recent years, many local governments and LGFVs have encountered significant financial challenges. Local governments rely heavily on real estate investments, which have been negatively impacted by stricter financial regulations and a downturn in the property market. There has also been economic strain since the Covid-19 pandemic. Although LGFVs are corporate entities subject to standard insolvency procedures, their debts are implicitly guaranteed by local governments. Consequently, the insolvency of LGFVs could threaten the financial stability of local governments. So far, the response to these financial difficulties has been largely ad hoc, with no reported LGFV defaults, but potential risks loom. This article begins with a brief introduction, followed by a comparative analysis of the Chinese domestic framework for managing financial distress in local governments (Section 2) and LGFVs (Section 3) against alternative approaches in other jurisdictions. Some of these alternatives have been identified in an INSOL International study on financially distressed local entities. The aim of this article is to explore the benefits and challenges of implementing more structured, multifaceted and innovative approaches to managing financial distress in these entities within China.

Where is the place of humanity in current corporate and insolvency frameworks and their theoretical underpinning? How can it be assured that the institutions that have been invented through human ingenuity and brilliance serves the collective human experience fully and equitably? Insolvency law has long been theoretically conceptualised on the basis of legal and contractual entitlements with the core purpose of maximising returns to the creditors owed by the debtor during its financial distress. With the onset and steady growth of the rescue culture with its acknowledgment of the broader impacts of insolvency on society and the economy, the simple creditor wealth maximisation approach does not provide equitable solutions for all of the stakeholder associated with the debtor company. In particular, involuntary, non-adjusting, and undiversified creditors, such as employees, tort creditors, and the environment, are often with little recourse and few opportunities for participation at the negotiation table. These stakeholders suffer from greater exposure and fragility in their corporate relationships with little power or choice on that relationship and its impact on them. If theories are devised with humans in mind, it may be possible to redress the inequity in fairness by changing the way we view financial distress and the broader purpose for resolving it. This article seeks to reframe the way fairness is assessed and applied to achieve equitable solutions in the corporate and insolvency sphere by examining it through a feminist jurisprudential lens, with a particular focus on Martha Fineman's Vulnerability Theory.

UNCITRAL is striving to determine the law applicable to cross-border insolvency avoidances. In principle, this should be the lex fori concursus. However, both Regulation (EU) 2015/848 and the laws of some European countries adopt a combination of lex fori concursus and lex causae called the ‘veto solution’. As a result, the insolvency practitioner applies the lex fori concursus, but the opponent may successfully object to the practitioner that the lex causae does not consider that act as challengeable. This article will maintain four theses. Firstly, when provisions of domestic insolvency avoidance law require proof, concerning the beneficiaries' mental state, this prerequisite concurs with the other prerequisites in detecting the debtor's fraudulent behaviour. This holds true also whenever statutes require that, at the time of the transaction, the beneficiaries should not be aware of the debtors' distress. In fact, in these cases the protection for the beneficiaries' good faith is only an unintended consequence of presumptions that aim at facilitating insolvency practitioners by shifting the burden of proof—this reverse burden transforms ‘bad faith’ proofs into ‘good faith’ proofs. Secondly, this statement covers also the many forms of actio pauliana that exist across Europe. Thirdly, Article 16 of Regulation (EU) 2015/848 is unlawful since it is non-compliant with Article 81 of the Treaty on the Functioning of the European Union, on which Regulation 2015/848 is based. Fourthly, a lawmaker who intends to determine the law applicable to cross-border insolvency avoidances ought to opt, both at the EU level and at the non-EU level, for the lex fori concursus only.

More than ever before the global situation and Europe's position in it let it appear advisable to speed up harmonsation processes. The present authors present a plea for a EU Regulation which offers a complete insolvency law as an option that can be chosen by certain European companies from a certain size on. Thereby creating a harmonised insolvency law at least for certain actors on the European market. The delays usually inherent in the previous harmonisation efforts from Brussels would, thus, be surpassed in the most rapid way.

There is little doubt that global commerce is the backbone of most national economies. Nonetheless, with trade transcending domestic boundaries and corporations becoming multinational, financial problems tend to become global exponentially. Cross-border insolvency law attempts to find the middle ground between regulating corporate distress and attracting foreign investment. Still, definitions of how to attain this middle ground are apt to change. This article assesses the existing models for treating cross-border insolvencies, including the legal and commercial challenges therein, in the absence of uniform or even harmonised mechanisms in the global legal arsenal. This fragmentation ultimately impedes the conduct of insolvency proceedings and serves as a disincentive for investors to trade abroad, especially in regimes with piecemeal, unpredictable, or even unhospitable insolvency frameworks. Using the BRICS bloc as a case study, this article invites the establishment of a regional concordat among the BRICS nations and suggests how the Concordat should regulate cross-border insolvency in the jurisdictions at stake. As emerging economic and geopolitical powerhouses with diverse legal systems and varying levels of financial integration, BRICS faces unique challenges in addressing cross-border insolvency. If implemented, the proposed Concordat will not only address the economic and legal challenges specific to BRICS but also position the bloc as a pioneer in developing an alternative insolvency regime adaptable to other emerging market contexts, in turn promoting financial stability, enhancing creditor confidence, and serving as a South–South cooperation model in international economic law.

The increasing complexity and frequency of multinational corporate bankruptcies pose challenges for insolvency frameworks globally. Cross-border corporate insolvency presents numerous complex legal issues, including the choice of forum (jurisdiction), determination of the applicable law for the insolvency proceedings, recognition and enforcement of foreign insolvency judgements, cooperation and coordination of insolvency proceedings initiated concurrently in multiple jurisdictions, the access and participation of foreign creditors and their representatives in ongoing insolvency proceedings in another jurisdiction and the protection of creditor rights, among others. Despite the widespread recognition of these legal challenges by nearly all nations globally, the responses to them vary from one jurisdiction to another. Recognising the undesirable consequences of diverse national laws and approaches, key international and regional legal instruments have been developed to establish a harmonised cross-border insolvency framework. In 2021, Ethiopia updated its decades-old Commercial Code of 1960, among other reforms, to implement an insolvency regime that promotes trade and investment. Book III of the Commercial Code, Proclamation No. 1243/2021 (the Revised Commercial Code, RCC), titled ‘Preventive Restructuring, Reorganization, and Bankruptcy Law’, aims to address financial difficulties and rescue distressed businesses by implementing many legal rules from MLCBI. In the area of cross-border corporate insolvency, the new regime adopts a modified universalism approach, classifying insolvency proceedings into main and secondary/territorial categories. The ‘centre of main interest’ (COMI) test is utilised to determine international jurisdiction for Ethiopian courts in commencing foreign main insolvency proceedings. On the other hand, Ethiopian courts may initiate territorial insolvency proceedings if a debtor has an establishment in Ethiopia, focusing on assets situated within the country. The new regime also addresses the recognition and enforcement of foreign judgements in bankruptcy, detailing the necessary conditions and documents for this process. The Ethiopian insolvency regime, despite improvements, still lacks explicit and adequate legal provisions for several important aspects of cross-border corporate insolvency, such as cross-border judicial cooperation, access and participation of foreign creditors and their representatives in insolvency proceedings commenced before an Ethiopian court, outbound recognition of insolvency proceedings initiated before an Ethiopian court over a debtor with its COMI in Ethiopia, etc. Addressing these shortcomings could enhance the regime's efficiency and effectiveness in managing cross-border corporate insolvencies. This article evaluates the effectiveness of Ethiopia's new insolvency law in managing multinational corporate insolvencies by identifying key legal issues and suggesting improvements.

This article revisits and amplifies the concept of vulnerable claimants by integrating human rights and resilience discourses into insolvency proceedings, particularly in the Latin American context. Because existing models usually assume equal claimant capacities in the insolvency arena, I propose a correction through nuanced resilience-based tests—absorption and adaptability—stepping forward from procedural corrections based only on information asymmetries and participation costs. Drawing from some examples in regional case law and regulations, this proposal aims to grant a more robust framework to offer tailored measures for lawmakers to protect the dignity and fundamental rights of vulnerable stakeholders and set standards for responsive States.