Global Frameworks or State-based Insolvencies—the Problem of Cross-border Insolvency

Abstract

AbstractWhereas the previous chapter considered the extent to which we should link between group members when resolving legal problems associated with groups, this chapter asks how to deal with the international element of the MEG insolvency, i.e., whether we should aim to unify insolvency process across borders. It considers the main schools of thought in cross-border insolvency, mainly the universality-territoriality dilemma, as well as the application of these theories in practice — examining different frameworks for cross-border insolvency including international initiatives at harmonization of insolvency laws. The chapter concludes with suggesting that both universalism and territorialism have a role to play in resolving the group insolvency problem. In deciding whether to apply universalism or territorialism based solutions consideration should be given to the degree to which the solution will achieve the goals of insolvency, but also to the type of MEG in default and the level of interference with state separateness which is invoked.