The theory of universality in insolvency, along with globalisation, has gained much traction across many jurisdictions in recent years. Briefly, the universality theory proposes that an insolvency proceeding has worldwide effect over all the assets of the insolvent company, wherever they may be.

The District Court for the Southern District of New York in Lehman Brothers recently threw cold water on a growing body of cases that permit compensation of professional fees incurred by individual members of official committees of unsecured creditors.

As predicted, the court in Tokyo has ruled that Mt. Gox will be liquidated. An “Announcement of Commencement of Bankruptcy Proceedings” was posted overnight April 24 by the Japanese bankruptcy trustee Nobuaki Kobayashi on the Mt. Gox site to confirm that the company is officially in bankruptcy (liquidation) in Japan.  The Announcement also includes a “Frequently Asked Questions” section to give a very high level overview of the liquidation process.

On April 16, Mt. Gox’s civil rehabilitation proceeding in Tokyo (something similar to a U.S. Chapter 11) was dismissed and the initial stages of a bankruptcy liquidation under Japanese law began. An Interim Administrator (Nobuaki Kobaysahi) has been named until the Japanese court decides whether the liquidation will begin and whether a different Administrator replaces the Interim Administrator. How this situation came to be is an interesting tale.

Mt. Gox filed a motion requesting the U.S. Bankruptcy Court’s approval of the form of the official notification of the May 6 recognition hearing as well as approving the service via email.  The motion also seeks to establish a deadline of seven days before that hearing for any party to object to the request for recognition of the Japanese insolvency case.  Additional notice would be provided by posting an approved form of notification on the Mt. Gox web site as well as at the Reddit.com site.

Tuesday evening, the Plaintiffs in the Illinois Class Action litigation filed motions with the U.S. Bankruptcy Court in Dallas asking that court to terminate the temporary stay it recently granted to Mt. Gox. They also asked that Robert Marie Mark Karpeles (the Foreign Representative for Mt. Gox) be ordered to provide testimony under oath in the United States regarding the Chapter 15 filing.

Introduction

The term “globalisation” is associated with expansion and the free movement of capital and resources. Funds raised in Country A can be invested in a variety of different countries for better returns. In times of economic expansion, it can be unfashionable to consider insolvency issues. This may explain why insolvency practitioners find themselves holding many discussions among themselves.

High Court holds that reports used by the Serious Fraud Office to obtain search and arrest warrants are not subject to litigation privilege in subsequent civil proceedings.

UK Supreme Court decision confirms traditional rules on enforcement of all US judgments in England and reverses a significant liberalisation of cross-border bankruptcy law.