1. MIND THE GAP: FIGHTING FORUM SHOPPING IN TRANSNATIONAL BANKRUPTCIES UNDER CHAPTER 15.
- Author
-
Bortner, Dolan D.
- Subjects
Balancing tests (Law) -- Analysis ,Judicial discretion -- Laws, regulations and rules ,Exterritoriality -- Laws, regulations and rules ,Stays of execution, proceedings, etc. -- Laws, regulations and rules ,Bankruptcy law -- Evaluation ,Forum shopping -- Prevention -- Laws, regulations and rules ,Corporate domicile -- Laws, regulations and rules ,Discovery (Law) -- Laws, regulations and rules ,Government regulation ,Bankruptcy Code of 1978 (11 U.S.C. 1501) - Abstract
TABLE OF CONTENTS Introduction 418 I. The Good and Bad of Forum Shopping in Bankruptcy 427 A. Domestic Forum Shopping Is se Widespread, Prompting Prai and Pushback Alike 428 B. [...], Forum shopping is ubiquitous in transnational bankruptcy. This has traditionaly resulted from debtors' twin powers to choose where they file and change the law that governs their property by shipping it abroad before bankruptcy. It was hoped that the United States' adoption of Chapter 15 of the Bankruptcy Code, which extends the debtor's home law to anywhere in the world it has assets, would close up shop. However, forum shopping has survived in subtler ways that have so far evaded scholarly attention. Consistent with Chapter 15's universalist aims, a foreign debtor can now enforce rights from its home country in the United States--regardless of whether the United States would give those rights to its own debtors. At the same time, limits that the home country sets on the debtor's rights are preempted by U.S. law whenever they are stricter than the Bankruptcy Code. The result is to give foreign debtors the best--and their creditors, the worst--of both the old and the new paradigms. To improve creditors' lot, while realigning Chapter 15 with its normative roots, this article proposes making the laws of the debtor's home country presumptive--whether more or less generous than U.S. law. Recognizing that foreign and U.S. law are sometimes irreconcilable, it further proffers a test to determine when this presumption should give way. The article contends this proposal is judicially feasible due to its similarity to inquiries bankruptcy judges already make and the shared common-law tradition of most countries that send Chapter 15 filers. Moreover, it demonstrates why instituting a home-law presumption would be a politically attractive amendment to the Bankruptcy Code. At a time when scholars increasingly doubt the practicality of the cross-border colaboration that Chapter 15 was intended to achieve, this article seeks to reinvigorate faith in the chapter while bringing it closer to its lodestar than ever before.
- Published
- 2024