CROSS-BORDER GROUP INSOLVENCY, A STUDY OF NORTEL CASE

Abstract

Introduction. This Article is a detailed analysis of one of the most complex and landmark judgments in the area of cross border group insolvency. It traces the timeline of the insolvency of Nortel Plc. and the simultaneous proceedings in multiple jurisdictions. Introduction followed by Literature Review. Research methods are exploratory in nature, since the study has to explore a case of the simultaneous proceedings in multiple jurisdictions. Results and discussions. The Article discusses that there are two major methods for dealing with corporate groups undergoing insolvency, which are: Procedural Coordination and Substantive Consolidation. Under such mechanisms which little to no precedence in any jurisdiction, this case carved out its own path to arrive at the outcome of Pro-Rata Allocation. The case is significant for being heard at the same time in two courtrooms, one in Delaware and one in Ontario, that were linked in order to receive live evidence together. This Article discusses the importance and significance of having a cross border group insolvency regime in place. In the era of Globalisation, the integration of national economies into a global economic system has been one of the most important developments of the last century