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Cardozo Journal of International and Comparative Law

Abstract

Insolvency of multinational enterprise groups is a complex and difficult process, which is partly why it has, thus far, failed to receive comprehensive treatment in legal regimes, despite its major importance. However, with UNCITRAL Working Group V recently taking this topic on board, this situation may change. The deliberations have now reached the final stages; it is therefore the aim of this paper to evaluate whether the Working Group's current proposals are normatively attractive and whether they are feasible (in terms of being embraced by legal regimes). The paper focuses on the deliberations regarding the international aspects of enterprise groups in insolvency. It investigates the attempts of the Working Group to reach consensus on measures for centralization, or coordination and cooperation of insolvency proceedings against group members. In the process, the paper demonstrates why a global approach (i.e. a "universalist" one) for multinational enterprise groups' insolvency is desirable, but also how "contractualist" methods and "territorialist" solutions may be appropriate in particular circumstances. The paper utilises a multi-tiered method for assessing the Working Group's proposals by examining their fit with general insolvency law goals (normatively desirable but also universally recognized), their accordance with territorialism concerns, and their compatibility with different managerial patterns of international groups. It concludes that, although they bring some level of universalism (in the group context) to a global consensus, and thus are a significant step in the right direction, the proposals do not represent the optimal solution in this context; they are overly influenced by "entity law" (emphasizing corporate separateness over enterprise considerations) and they refrain from giving sufficient scope for different levels of solutions that could match economic realities of groups.

Disciplines

Bankruptcy Law | Conflict of Laws | Law

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