Rethinking International Insolvency: The Neglected Role of Choice-of-Law Rules and Theory

Abstract

Solutions to the problem of international bankruptcy are generally framed as either universalist (arguing that international bankruptcies should be administered in a single forum) or territorialist (arguing in favor of multiple local bankruptcies). This article seeks to expand this debate by using traditional conflicts theory to examine the problem of cross-border bankruptcy. It analyzes the current regime under which cross-border bankruptcies are administered in U.S. courts, concluding that this regime operates as a multilateralist (jurisdiction-selecting) regime. Concluding that multilateralism is an appropriate method for resolving choice-of-law issues in international insolvency, the article analyzes some possible refinements to the current system. It argues that a more pointedly multilateralist approach would better serve the goals of the international bankruptcy regime.

Keywords: International bankruptcy, international insolvency, choice-of-law, comity