Pari Passu Research Articles

International Co‐operation in Cross‐Border Insolvency: HIH Insurance

The House of Lords decision in HIH Insurance raised important questions about the pari passu principle of distribution in cross‐border insolvency. This comment examines the case in light of academic debate, arguing that Lord Hoffmann's application of the principle of (modified) universalism achieved distributive justice amongst HIH group creditors.

Exploring the usefulness of inflammation-sensitive biomarkers to reveal potential sex differences in relation to low-grade inflammation in individuals with the metabolic syndrome

Sex differences exist in the expression of different inflammation-sensitive biomarkers in relation to the metabolic syndrome (MetS). We have presently explored these differences in relation to commonly used inflammation-sensitive biomarkers including the high-sensitivity C-reactive protein (hs-CRP), quantitative fibrinogen, erythrocyte sedimentation rate (ESR), white blood cell count (WBCC), and absolute number of polymorphonuclear leukocytes. This is a cross-sectional analysis of a group of apparently healthy men (n = 5560) and women (n = 3049) in whom the results of the above-mentioned inflammation-sensitive biomarkers were analyzed in relation to the different components of MetS. The concentration of hs-CRP increased pari passu with the number of components of the MetS, the differences between the sexes being significant for any number of components of the MetS. Regarding fibrinogen, the influence of sex turned significant for waist only, similarly to the results of the ESR. None of these interactions were found to be significant for both the WBCC and the absolute number of polymorphonuclear leukocytes. Quantitative fibrinogen, ESR, WBCC, as well as the absolute number of polymorphonuclear leukocytes are not sensitive enough to reveal the potential sex differences in relation to the various components of the MetS and the expression of the low-grade inflammation. High-sensitivity CRP does have the capability to reveal these differences.

Expression of glutamine synthetase and glutamate dehydrogenase in the latent phase and chronic phase in the kainate model of temporal lobe epilepsy

It has been suggested that astrocytic glutamate release or perturbed glutamate metabolism contributes to the proneness to epileptic seizures. Here we investigated whether astrocytic contents of the major glutamate degrading enzymes glutamine synthetase (GS) and glutamate dehydrogenase (GDH) decreases on moving from the latent phase (prior to seizures) to the chronic phase (after onset of seizures) in the kainate (KA) model of temporal lobe epilepsy. Western blotting and immunogold analysis of hippocampal formation indicated similar levels of GDH in the latent and chronic phases of KA injected rats and in corresponding controls. In contrast, the level of GS was increased in the latent phase compared with controls, as assessed by Western blots of whole hippocampal formation and subregions. The increase in GS paralleled that of glial fibrillary acidic protein (GFAP). Compared with the latent phase, the chronic phase revealed a lower level of GS (approaching control levels) but an unchanged GFAP content. The decrease in GS from latent to chronic phase was significant in whole hippocampal formation, dentate gyrus and CA3. It is concluded that kainate treated rats show an initial increase in GS, pari passu with the increase in GFAP, and a secondary decrease in GS that is not accompanied by a similar loss of GFAP. In a situation where glutamate catabolism is in high demand the secondary reduction in GS level may be sufficient to contribute to the seizure proneness that develops between the latent and chronic phases.

Impaired skin and hair follicle development in Runx2 deficient mice

The transcription factor, Runx2, is known to play crucial roles in skeletal and tooth morphogenesis. Here we document that Runx2 has a regulatory role in skin and hair follicle development. The expression of Runx2 is restricted to hair follicles and is dynamic, pari passu with follicle development. Follicle maturation is delayed in the absence of Runx2 and overall skin and epidermal thickness of Runx2 null embryos is significantly reduced. The Runx2 null epidermis is hypoplastic, displaying reduced expression of Keratin 14, Keratin 1 and markers of proliferation. The expression pattern of Runx2 in the bulb epithelium of mature hair follicles is asymmetric and strikingly similar to that of Sonic hedgehog. This suggests that Runx2 may be a regulator of hedgehog signaling in skin as it is in bones and teeth. Supporting this possibility, we demonstrate that Sonic hedgehog, Patched1 and Gli1 transcripts are reduced in the skin of Runx2 null embryos. Moreover, we document Patched1 expression in epidermal basal cells and show that the skin of Sonic+/− embryos is thinner than that of wild-type littermates. These observations suggest that Runx2 and hedgehog signaling are involved in the well known, but unexplained, coupling of skin thickness to hair follicle development.

Anesthesia for Genetic, Metabolic, and Dysmorphic Syndromes of Childhood, 2nd Edition.

Children’s Hospital Boston, Harvard Medical School, Boston, Massachusetts. robert.holzman@childrens.harvard.eduAnesthesia for Genetic, Metabolic, and Dysmorphic Syndromes of Childhood, 2nd Edition. By Victor C. Baum, M.D., and Jennifer E. O’Flaherty, M.D., M.P.H. Philadelphia, Lippincott, Williams & Wilkins, 2007. Pages: 415. Price: $149.00.In this second edition of Anesthesia for Genetic, Metabolic and Dysmorphic Syndromes of Childhood , Baum and O’Flaherty have once again made available to their anesthesiology colleagues worldwide a broad review of rare disorders, therefore preserving the essence of the first edition while refreshing previous phenotypic descriptions with an evolving genomically based approach. The authors, pediatricians as well as anesthesiologists, convey both specialties well, and the result is a smoothly written and stylistically consistent reference of increasing importance, as many of these patients with rare syndromes now survive longer than ever before.The authors’ foreword notes, pari passu , that this is an unindexed book, basically listing numerically and alphabetically the syndromes it covers. As justification they inveigle, quite reasonably, that the purpose of the book is not to enable anesthesiologists to make genetic diagnoses but rather, with the diagnosis recognized preoperatively, to adequately appreciate the syndromic implications to formulate anesthetic management based on existing clinical skills and judgment. This is just what any clinician would wish from a medical consultant!A glossary of typical Classic language-derived terms (cubitus varus , cutis marmorata , pes cavus , among others) is mercifully placed before the content. The consistency of the template approach is praiseworthy for ease of use and uniformity. The template is organized by system, with anesthetic considerations following. Each numbered or named syndrome is referenced by number to (McKusick’s) Mendelian Inheritance in Man, the bible of syndromic and dysmorphic disorders.1Like hidden treasures, there are often amusing historical pearls in the miscellaneous subsections. For example, under Leber Congenital Amaurosis: “Theodor Leber pronounced his name ‘Layber’ and was the founder of scientific ophthalmology. He had wanted to be a chemist, but was told by Professor Bunsen that there were already too many chemists, so he chose medicine as an alternative.” The Medieval legend of Ondine is related in the section on Ondine’s Curse. There are many such delightful and illuminating diversions embedded within the text. For those who deal with syndromic patients frequently at tertiary or quarternary care pediatric centers, this template organization subtly trains clinicians in a consistent approach to complicated, and sometimes intimidating, disorders. Illustrations are not overdone but are very helpful when shown. At the end of the Z’s, several pages of beloved intermediary metabolic pathways (steroid biosynthesis, tyrosine metabolism, the simplified urea cycle, metabolism of branched chain amino acids, glycogen metabolism, and the porphyrias) are illustrated, along with various pathway impairments resulting in disease states along the way.Cross-references are readily provided for syndromes with multiple names. Although the authors are unapologetic about the lack of an index, it may take a bit longer to navigate specifically to a disorder unless you know exactly what you are looking for; in most circumstances, practicing anesthesiologists will, because most of these patients already have a diagnosis by the time we see them. References are intriguingly listed in reverse chronological order rather than by appearance in the text of the section. This novel approach serves the curious reader well in culling additional, more recent information.Is this book too limited for the practicing anesthesiologist? This view is too myopic. Many patients who would never have survived beyond the first several months to years of life are surviving into adulthood. Many patients who would have been cognitively and/or physically impaired are now competent and independently functioning adults. They have unique as well as general health and surgical problems and, as with our successes in pediatric surgery and critical care, will visit us in the operating room for many years. For these reasons, this compendium of relatively rare disorders and their anesthetic implications, lucidly written, superbly organized and laden with sound advice and islands of history and delightful commentary about these disorders, should be readily available to all practitioners of anesthesia. Moreover, it holds substantial importance for all who may care for syndromic patients in an acute setting such as emergency medicine, interventional specialties such as cardiology or radiology, surgeons, and intensivists. Geneticists and dysmorphologists who are consultants to anesthesiologists will also be interested in this book for the mirror-image insight it will impart.Children’s Hospital Boston, Harvard Medical School, Boston, Massachusetts. robert.holzman@childrens.harvard.edu

The Market Reaction to Legal Shocks and Their Antidotes: Lessons from the Sovereign Debt Market

In October 2000 a hedge fund holding an unpaid debt claim won an enormous victory against the debtor, the Republic of Peru, through an opportunistic interpretation of the common pari passu clause by a Brussels court. This development was met by charges from policy makers and practitioners that the court's decision (its novel interpretation of the pari passu clause) would lead to a dramatic increase in the risks of holdout litigation faced by sovereign debtors. Over the ensuing years, multiple reform solutions were proposed including the revision of certain contractual terms, the filing of amicus briefs in a key case, and the imposition of an international bankruptcy regime for sovereigns. The question, looking back, that this Article empirically investigates is whether the capital markets actually perceived a significant increase in risk at the time of the October 2000 Brussels court decision. Equally important is whether markets discriminate among competing versions of the pari passu clause based on their relative risks for holdouts. And, to the extent the markets did react to the increase in legal risk, did any of the antidotes that were implemented to reduce the supposed increased holdout risk work? We offer evidence that bond prices did respond to this legal shock, that markets do discriminate based on the relative holdout risk posed by differing forms of the pari passu clause, and provide surprising evidence regarding the efficacy of the government-sponsored antidote, the advent of collective action clauses.

CHOICE OF FORUM IN INTERNATIONAL HUMAN RIGHTS ADJUDICATION AND THE UNITY/FRAGMENTATION DEBATE: IS PLURALITY THE WAY FORWARD?

In recent times private creditors have increasingly begun to resort to litigation against States in case of sovereign debt default. One of the most complex recent cases concerns the legal proceedings brought against Argentina by NML Capital Limited before the courts of the United States (US). The plaintiffs are primarily “vulture funds”, seeking profit by buying heavily discounted distressed debt, that have rejected the restructuring terms accepted by the majority of Argentina’s creditors. There are two main questions at the heart of the present dispute: sovereign immunity and the alleged breach of the US Foreign Sovereign Immunities Act (FSIA), and the interpretation of the pari passu clause. The US Supreme Court held that the FSIA does not limit the scope of discovery against foreign sovereign assets and rejected Argentina’s petition for certiorari to review the Second Circuit decision upholding the injunction orders that required Argentina to pay NML Capital and the other plaintiffs whenever it pays the holders of its restructured debt. This comment assesses the approach of the US courts in relation to discovery and their interpretation of the pari passu provision. In particular, it argues that the outcome of this legal battle threatens future sovereign debt restructurings and confirms the gravity of the lack of a binding central restructuring mechanism.

Contractarianism, Contractualism, and the Law of Corporate Insolvency

A version of this paper appears in [2007] Singapore Journal of Legal Studies (July). What is the appropriate way of theorising about corporate bankruptcy law? That lies, argues this paper, in rejecting Pareto and Kaldor-Hicks efficiency in favour of a particular conception of transaction cost efficiency, and in rejecting the 'contractarian' Creditors' Bargain Model in favour of the 'contractualist' Authentic Consent Model. The paper vindicates these arguments with an analysis of the automatic stay which characterises the collective liquidation regime, of the pari passu principle often said to be at the heart of this regime, and of the liability imposed in some jurisdictions on the managers of terminally distressed companies for failing to take reasonable steps to avoid further loss to their company's creditors.

Long-Term Psychoanalytic Therapy as a Life-Saving Procedure

A dramatic long-term psychoanalytic treatment of a psychotic character disorder is presented in detail. This patient began therapy with a long standing history of an eating disorder for which she had received many hospitalizations and forms of treatment without any success. She was in a deep despair and as a last resort agreed to a psychoanalytic therapy. During the many years of treatment the eating disorder completely resolved but was replaced by a series of very dangerous accidents that occurred each time she was betrayed and disappointed by a boy friend. This went on pari passu with a deepening understanding of her childhood and her psychodynamics but the middle of the therapy was very stormy and required tenacious efforts to maintain the treatment. The self-destructive behavior was traced to early and profound childhood disappointments and a sense that these were her fault because she was so unlovable and therefore deserved punishment. A dangerous stalemate developed in the treatment after a number of years. The analyst presented the case to colleagues several times and wrote it up in detail, which enabled him to understand his own countertransference and resolve it. This resulted in a dramatic change in the patient and a very favorable and happy ending to this very difficult treatment after 15 years. Although the author believes all patients in psychoanalysis should be approached with as neutral and objective a stance as possible, emphasizing free association and dream material in order to interpret the crucial childhood determinants of the patient's psychopathology, in cases such as psychotic character disorders the outcome clearly also depends on interpersonal factors. The case illustrates the deep partly conscious and partly unconscious interaction between a patient and her analyst over many years of treatment and the profound effect this has on the outcome. It underscores the importance of patients being allowed to heal in their own way and in their own time without intrusion or interference from the analyst. It also demonstrates the crucial importance of long-term psychoanalytic therapy as a life-saving procedure in cases where it is appropriate in spite of the great amount of time and expense involved.

Central Pontine Signal Changes in Wilson's Disease: Distinct MRI Morphology and Sequential Changes with De‐Coppering Therapy

Reports of central pontine myelinolysis (CPM)-like changes in Wilson's disease (WD) and its sequential changes are exceptional. The aim was to study the MRI characteristics of CPM-like changes in WD and the serial changes. Among the 121 patients of WD, twenty (M:F:9:11, age at onset: 14.2 +/- 4.6 years) had features similar to CPM. All had progressive neuropsychiatric form of WD. All except five were on de-coppering treatment. None had acute deterioration or hepatic failure. Ten patients underwent repeat studies. Twenty patients with CPM-like changes manifested with characteristic phenotype of WD. Three distinct patterns of CPM-like changes were observed: (a) characteristic round shape -7, (b) "bisected" -9, and (c) "trisected" -4. Only one had signal changes suggesting extra-pontine myelinolysis. All patients had contiguous involvement of midbrain. Serial MRI evaluation in 10 patients, at mean interval period of 17.4 +/- 13.2 months, revealed complete reversal in one, partial improvement in five, and no change in three. Clinical and MRI improvement occurred pari passu, except in one. CPM-like changes in WD are perhaps under-recognized and are distinct from the commonly known "osmotic demyelination." It is potentially reversible similar to other MRI features of WD.

Willingness to Pay and the Sovereign Debt Contract

This paper uses a contract theory model to argue that covenants ruling debt renegotiations are important to assure the sovereign willingness to pay. The model includes the following features: first, collective action clauses, exit consents, aggregation provisions and pari passu clauses play an important role in the post default “game” of negotiations and coalitions. These covenants are represented in reduced form by the endogenous probability of refinancing a defaulted sovereign debt. Second, the model has “endogenous bad luck” because the unfavorable state of nature where default occurs depends on the level of indebtedness, which is itself an endogenous variable. Third, “vultures”, contrary to conventional wisdom, tend to improve the access of emerging economies to capital markets because they might help to rule out strategic defaults. And fourth, under special assumptions the model is able to analyze the possibility of post default discrimination between domestic and foreign bondholders.

Education and Social Capital

Education is one of the most important predictors—usually, in fact, the most important predictor—of many forms of political and social engagement—from voting to chairing a local committee to hosting a dinner party to trusting others. Over the last half century (and more) educational levels in the United States have risen sharply. In 1960 only 41 percent of American adults had graduated from high school; in 1998 82 percent had. In 1960 only 8 percent of American adults had a college degree; in 1998 24 percent had. Yet levels of political and social participation have not risen pari passu with this dramatic increase in education, and by some accounts [Putnam, 1995a; 1995b; 2000] have even fallen. For at least two decades, political scientists have mused about this paradoxical “puzzle” [Brody, 1978]. Recently, however, Norman Nie, Jane Junn, and Kenneth Stehlik-Barry [1996, hereafter NJS-B] have offered an elegant and potentially powerful resolution to this paradox, beginning with a crucial distinction between the “relative” and “absolute” effects of education. If more people now have a college degree, they argue, perhaps the sociological signifi cance of the credential has been devalued. Social status is, for example, associated with education, but we would not assume that just because more Americans are educated than ever before, America has a greater volume of social status than ever before. To the extent that education is merely about sorting people, not about adding to their skills and knowledge and civic values, then no puzzle remains to be explained. In fact, NJS-B conclude, participation is affected primarily by relative educational levels, and thus has not been (and should not have been expected to be) rising with aggregate educational levels. The distinction that NJS-B have introduced is important. Education has external effects, as well as internal ones. In principle, my behavior can be affected not only by my education, but also by that of others around me. The core issue is whether (holding constant my own education), I am more likely or less likely to participate politically and socially if those around me become more educated. Besides its academic inter

Effect of amendments on windrow composting of sugar industry pressmud

Bioconversion of sugar and distillery industrial wastes with other biodegradables into enriched compost is an important possibility in need of research. In this paper, changes in temperature and physico-chemical (pH, NH 4 + – N , C/N ratio, CEC) parameters during windrow composting, related to biological stabilization of the compost, were studied. The rise in temperature, which occurred as composting progressed, was accompanied by an increase in NH 4 + – N and the passage of the thermophilic phase to mesophilic took place between 90 and 105 days. This overall pattern was observed in all composting mixes, whereby the concentrations of NH 4 + – N increased rapidly and then declined gradually over the course of monitoring pari passu with increase in NO 3 - – N . The C/N ratios of the composting mixes decreased substantially by the 90th day in full thermophilic phase and became comparatively stable later on. Addition of additives showed potential in improving the C/N ratios. Increases in cation exchange capacity (CEC) and the germination index value of a sensitive crop ( Raphanus sativus) had value in establishing the optimum degree of maturity. The rise and fall of temperature and changes in NH 4 + – N concentrations, C/N ratios and CEC over time proved to be reliable indicators of the progress of the composting process for establishing biological stability and compost maturity.

How Contract Rights and Public Sector Governance Affect Infrastructure Investment

Contract enforcement risk has become more prevalent in build-operate-transfer (BOT) projects. Recent trends in Southeast Asia have shown that non-enforcement of contract rights by the public sector have common characteristics such as: introduction of competitors into a contractual relationship believed to have been already awarded as a monopoly, opportunistic behavior of a public-sector joint venture partner, and attempts to void or renegotiate a contract on the grounds that it provides excessive profit to the private sector. The Philippines, in particular, traces non-enforcement of contract rights back to weak enforcement of property rights. The author9s recommendations for the Philippines include the establishment of a private-sector investment fund by a multilateral agency, from which amounts could be drawn while disputes between the sovereign and the private sector were under settlement in the International Commerce Court; the formation of a bureau for monitoring official development assistance (ODA) and BOT projects by a multilateral agency; the assumption by equity investors of debt positions in their projects to ensure pari passu status with other lenders in negotiations with the sovereign; and empowerment of the informal sector to promote contract rights enforcement. <b>TOPICS:</b>Project finance, emerging markets, exchanges/markets/clearinghouses

The Reformation of the Keys: Confession, Conscience, and Authority in Sixteenth-Century Germany (review)

Reformation of Keys: Confession, Conscience, and Authority in Sixteenth-Century Germany. By Ronald K. Rittgers. (Cambridge, Massachusetts: Harvard University Press. 2004. Pp. xii, 318. $49.95.) This is a revised Harvard Ph.D. dissertation, produced under direction of Steven Ozment, Ronald Rittgers, who is presently an assistant professor of History of Christianity at Yale. It is, regrettably, a deeply flawed work in several major respects. First, Rittgers is disturbingly confused about the power of keys and blithely accepts Luther's casual equation thereof with power to forgive sin. Since Luther's central attack was on Church's penitential system, it suited his theological and rhetorical purposes to conflate these issues; but 1530 he evidently felt obliged to respond to his many critics penning a treatise on The Keys in which he flatly denied that power of binding and loosing, conferred first on Peter (Matt. 16:19) and then on other apostles (Matt. 18:18), can have meant anything more than power to forgive sins given to them after Resurrection (John 20:23). Now modern biblical scholars agree that and loose are technical rabbinical terms meaning forbid and permit, but Luther dismissed all that as pure Roman fabrication. Unfortunately, that position makes much of previous thousand years in history of Church, especially in West, largely incomprehensible. Matt. 16:19 is arguably single most difficult text in medieval political thought, for Jesus is indisputably on record as saying, Whatsoever you bind on earth shall be bound also in heaven . . . , which suggests no clear lines of demarcation, if any at all, between spiritual and temporal authority. When Augustine famously wrote, Roma locuta, causa finita, it was not writ in heavens what limits of juridical competence of bishop of Rome were. As ecclesiastical and especially papal jurisdiction came to be worked out in protracted struggles of High Middle Ages, and as theory of papal plenitude of power pari passu came to be fully elaborated, by reason of sin (ratione peccati) was but one of several major sources of that authority. Although many questions were raised about its extent and practical limits were sometimes imposed upon it (as, for example, in Statute of Praemunire in England), no outright rejections of papal or ecclesiastical jurisdiction as such were asserted in West before onset of Protestant Reformations. Thus, for example, such matters as marriage and probate came commonly to fall under its purview, notaries everywhere did their work by imperial and papal authority, and popes drew on universal jurisdiction they claimed to launch crusades and, later, to carve up world between Spanish and Portuguese. Many criticized abuses in this system, and a few thinkers and preachers assaulted its very premises; but powers that were in Europe rarely if ever joined in these attacks before 1520's. But of all of this Rittgers is evidently completely unaware, even though he cites Brian Tierney's still essential Crisis of Church State, 1050-1300 (1964) in his bibliography. Rittgers' unwitting confessional blindspot thus constitutes a major impediment to his historical understanding of what might well be considered keystone of medieval Church, and it would therefore seem to follow that his teaching of history of Christianity must inevitably be highly problematical. (It should be pointed out that Rittgers is hardly in this respect. Indeed, most of modern scholars he cites accept Luther's neat legerdemain, just as most Protestants believe incorrectly that justification faith is asserted in Paul's epistle to Romans, when in fact Luther added word alone in seeming contradiction of what Paul says at 2:6 (For [God] will render to every man according to his works . . .). Still, for an historian of Christianity to suffer from this chasm in his understanding is frankly appalling. …

Understanding Debt Subordination and the Rule in Cherry v. Boultbee: Re SSSL Realisations

A debt subordination may in general take two forms, viz., contractual subordination and turnover subordination. A contractual subordination occurs where, by agreement between a debtor and a creditor, debts owed to the creditor are to rank below other debts of the debtor. A turnover subordination (which may or may not involve a trust) requires the junior creditor, on the insolvency of the debtor, to turn over to the senior creditor all recoveries received by the junior creditor in respect of the junior debt. Where a trust is utilized, this technique is also called trust subordination. The English Court of Appeal decision in Re SSSL Realisations has confirmed that is valid, binding and enforceable. If necessary, the court would enforce it by injunction. Furthermore, a properly drafted trust subordination will not become a security interest. While championing the enforceability of contractual subordination especially in case of insolvency, the Court of Appeal made no mention of some age-old arguments that contractual subordination is of doubtful validity because it infringes the principle of pari passu distribution. In light of this decision, it is no longer credible to claim that the pari passu principle is fundamental in insolvency practice. This decision also confirms that a subordination agreement is unlikely to be liable to disclaimer by a liquidator of the subordinated creditor. The court also took the opportunity to restate how the rule in Cherry v. Boultbee interacts with corporate insolvency law. In brief, the rule in Cherry v. Boultbee holds that that a person cannot share in a fund in relation to which he is also a debtor without first contributing to the whole by paying his debt. While the court made a commendable effort to restate this equitable rule, some aspects of the restatement are dubious. In particular, it failed to consider the rule's compatibility with the contractual setting and failed to engage fully the very authorities it purportedly relied upon. Instead, it rolled out self-serving numbers to underscore its answer to a purportedly unprecedented question of principle.

Globalization in the World of Finance: An Analytical History

One of the many definitions of financial globalization is integration of domestic financial system of a country with the global financial markets and institutions. Enabling framework of financial globalization essentially includes liberalization and deregulation of the domestic financial sector as well as liberalization of the capital account. As economies progressively integrate globally, pari passu the financial structures of markets and the world of finance change. Financial globalization cannot be considered a novel phenomenon. Trans-country capital movements are centuries old. The oil shock of 1973 and the collapse of the Bretton Woods system, both of these developments were momentous and were responsible for laying the foundation of the contemporary era of financial globalization. After the collapse of the Bretton Woods system, some middle-income developing economies began to liberalize and open up for greater capital mobility, while keeping an autonomous control over their monetary policy. Advances in IT and computer technology are cited as one of the most important factors driving and supporting financial globalization. Transnational corporations (TNCs) also helped in global financial integration. They expanded their networks by merging with or acquiring other national and international firms. The prime movers in financial globalization are governments, borrowers, investors, and financial institutions. Each one of these market participants propelled economies towards financial integration in a proactive manner. Financial globalization has caused dramatic changes in the structure of national and international capital markets. The most significant change in the capital markets was in the banking system, which went through a process of dis-intermediation. This was a market transformation of fundamental nature. Contagions and crises are the downsides of financial globalization. Economic and financial crises of the 1990s portend to the fact that financial globalization is not a win-win game, and that it can potentially lead to serious disorder and high cost in terms of bank failures, corporate bankruptcies, stock market turbulence, depletion of foreign exchange reserves, currency depreciation and increased fiscal burden. A unique characteristic of globalized financial markets is reversal of capital flows when market perception regarding the creditworthiness of the borrowing entity changes. Cross-country financial flows to the emerging market economies were low, at during the mid-1970s. They increased at a healthy clip during the decades of 1980s and 1990s, peaking in 1997. They suffered a sharp decline after that because of the Asian and Russian financial and economic crises. The composition of external capital underwent a dramatic transformation during this period. Official flows either stagnated or declined. As a result their relative significance in global capital flows dwindled. In their place, private capital flows became the major source of external finance for a good number of emerging market economies. FDI became an important and dependable source of finance for the emerging markets and other middle-income economies during the decade of the 1980s and 1990s. Portfolio investment in stocks and bond markets also increased substantially. Global institutional investors found this channel of investment functional and profitable. Mutual funds, insurance companies, and pension funds channeled large amounts through portfolio investment into the emerging market economies. As financial globalization progressed, presence of international financial intermediaries has expanded considerably. This applies more to international commercial banks than to investment banks, insurance companies and mutual funds. It is incorrect to say that their global expansion has been uniform because this has occurred unevenly. International bond issuance activity by emerging market economies recorded a sharp spurt in 1993. Emerging market economies began using ADRs and GDRs for raising capital from the global capital markets in 1990 in a small way.

Pari Passu Distribution and Post-Petition Disposition: A Rationalisation of Re Tain Construction

The UK Insolvency Act 1986, s 127 provides that in a winding up by the court any disposition of the company's property made after the commencement of the winding up is void unless the court otherwise orders. The court recently held in Re Tain Construction that the policy of s 127 is to prevent the circumvention of the pari passu distribution of assets which is at the foundation of insolvency law. Accordingly, in deciding whether to validate a transaction, the court must have regard to this policy. Furthermore, a s 127 claim is susceptible to the change of position defence. While the substantive decision is correct, its reasoning is highly unfortunate and misguided almost on all counts. As illustrated by the reasoning in Re Tain Construction, there is a total lack of understanding of the basis of the s 127 regime in particular and the pari passu principle in general. It does not help that writers persist in pursuing the victory of pari passu through capitulation, and in Re Tain Construction the court's insistence on the relevance of the pari passu principle is flatly contradicted by the facts of the case. It is submitted that the s 127 regime performs three functions, none of which has anything to do with the pari passu principle: preservation of the insolvent estate, sustaining the order of priority of insolvency distribution, and enabling the debtor to proceed with its business during the gap period between the presentation of the winding up petition and the making of winding up order. In other words, it perfects the regimes of preference and transactions at an undervalue, while at the same time ensuring that the debtor's business is not paralysed by the filing of a winding up petition. While the right of recovery under s 127 is restitutionary, the reason for restitution is policy-based. This policy motivated restitution may only be overridden through the validation machinery. The general defence of change of position has no place in this regard.

The Pari Passu Principle in English Ancillary Proceedings: Re Home Insurance Company

This paper seeks to demonstrate that, insofar as English insolvency proceedings are ancillary to foreign insolvency proceedings, the so-called pari passu principle would not constitute hurdles to English assets being handed over to a foreign insolvency official for distribution according to the foreign insolvency regime.

The Principle against Divestiture in Insolvency Revisited: Fraser v. Oystertec

It is second nature to almost every insolvency practitioner that parties cannot by agreement subvert the fundamental principle of pari passu distribution of an insolvent's assets. It thus follows that, for example, there cannot be a valid contract that a man's property shall remain his until his bankruptcy, and on the happening of that event go over to someone else, and be taken away from his creditors. Similarly, contractual set-off provisions resulting in a distribution of an insolvent's property in a manner contrary to the pari passu principle are invalid. It has been said that the above propositions are limited to liquidation or bankruptcy because the pari passu principle is concerned to ensure an equitable distribution of the insolvent's estate among its creditors and liquidation or bankruptcy is the only collective insolvency process which involves the distribution of assets among the general body of creditors. Put simply, it is second nature to almost every insolvency practitioner to lump the principle against divestiture and the principle of pari passu distribution into one interchangeable mass. However, the recent decision in Fraser v. Oystertec has conclusively proved that almost every insolvency practitioner's second nature is wrong. The principle established in ex p. Mackay and British Eagle has nothing whatsoever to do with the so-called fundamental principle of pari passu distribution, and hence its operation is not limited to formal insolvency proceedings. This decision may also have cast some doubt on the operation of contractual set-off and netting even prior to any formal insolvency proceedings.