Recently the European Communication and Cooperation Guidelines For Cross-border Insolvency have been published (in our jargon called CoCo Guidelines). These Guidelines aim to overcome the cumbersome procedural model of the EC Insolvency Regulation dealing with assets of one debtor spread over several or all jurisdictions in the EU. This can add up to 26 member states (not Denmark).
Since China’s new Enterprise Bankruptcy Act came into force on June 1, 2007, the role and capacity of the newly created independent administrator has drawn broad attention among bankruptcy practitioners both in China and across borders. This is because the introduction of the independent administrator into the new bankruptcy proceedings, as the functional counterpart of the trustee under the Bankruptcy Code, is an important step towards a market economy in the insolvency area.
There have been several articles recently published discussing and critiquing the early chapter 15 case law.  However, two articles in particular are worth noting. The first is entitled "A Tale of Two Proceedings: ‘Turnabout Is Fair Play’ in the Yukos U.S. Bankruptcy Cases," which discusses some of the intriguing issues presented by the Yukos chapter 11 and chapter 15 cases and their implications for future cross-border restructurings.
Case Filed Under § 304 – discussing Chapter 15
In re Atrimm, S.r.L., 335 B.R. 149 (Bankr. C.D. Cal. 2005)
Prior to its repeal with the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act, §304 provided authority for adjudicating international insolvency issues before the U.S. Bankruptcy courts where a proceeding had already been filed or would be more appropriately filed in a foreign jurisdiction.
The reform of Canada’s insolvency laws continues to move forward slowly. In an article published in a previous edition of this newsletter, I outlined the proposed amendments to Canada’s two major insolvency statutes, the Bankruptcy and Insolvency Act (BIA) and the Companies’ Creditors Arrangement Act (CCAA) under Bill C-55.
By all accounts the Chinese Bankruptcy Law needed reform, and on June 1, 2007 the new bankruptcy law will take effect. Although the old law will still apply to state-owned enterprises (SOEs) until 2008,1 some experts believe the SOE exception for SOEs will be extended beyond 2008.
The ever-growing proliferation of international trade and the rise of increasingly large transnational corporations means that whenever the next big downturn overtakes us, there will be an unprecedented level of transnational insolvency proceedings.
China’s market-oriented reform has generally been successful since it started in the late 1970s. However, the transition of its corporate and financial sectors has suffered greatly from the absence of a functioning insolvency regime. While a trial bankruptcy law was adopted in 1986 and took effect in 1988, it covered only state-owned enterprises (SOEs), which now account for only about one third of the country’s total output.