Document Type

Article

Disciplines

International Law

Abstract

The importance of flexibility in international insolvencies is clearly demonstrated by the United States Bankruptcy Code. Section 304, governing cases ancillary to a foreign proceeding, provides that the court may, among specific forms of relief available to a foreign representative, "order other appropriate relief.' 2 This provision has been interpreted quite liberally, affording bankruptcy courts freedom to "broadly mold appropriate relief in near blank check fashion."3 While flexibility may not demand fair, predictable, and efficient results, it should at least allow for such results. Though probably true for most insolvency proceedings, either in reorganization or liquidation, this is perhaps nowhere more crucial than in international insolvency proceedings. The varied types of businesses and countries, with their attendant differences in corporate structure and objective, as well as national culture and law, provide for an ever-changing kaleidoscope of stages upon which are played the dramas of insolvency, all, it is hoped, to the most worthwhile conclusion possible.

And yet, despite the existence of a few treaties and the hint of movement toward increased cooperation, the international insolvency arena has been historically stifling due to a lack of common rules and cooperation. In this climate, the Cross-Border Insolvency Concordat has been adopted by the International Bar Association as a "framework for harmonizing cross-border insolvency proceedings.'" This article asserts that the Concordat indicates the direction the law may go in resolving cross-border insolvency issues. As demonstrated herein, some portions of the Concordat are likely to become evidence of customary international insolvency law, if they have not already done so. On a more practical level, the Concordat, as evidence of customary international law (even if only in its formative stages), provides courts and international practitioners with guidance on how to achieve fair, predictable, and efficient results which tend to increase the value of companies in liquidation or reorganization. Part II provides context by discussing some significant influences on international insolvencies. Part III outlines basic principles of customary international law as a foundation for analyzing the extent to which the Concordat is evidence of such law. In Part IV, the principles of the Concordat are presented, as well as other sources of international law. It will demonstrate the extent to which the Concordat represents the customary international law of insolvency.

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