In our increasingly global world, cross-border insolvencies have become relatively commonplace. Lehman Brothers and Nortel Networks are just two of the matters where parallel proceedings in multiple jurisdictions were necessary in order to effectively administer the debtors’ estates. The relevant legislation and guidance that were established to assist with these types of cross-border matters – namely the Insolvency Regulation (EC) 1346/2000 (the “Regulation”), which applies across the European Union with the exception of Denmark, and the UNCITRAL Model Law on Cross-Border Insolvency (the “Model Law”), which has 25 signatories to date including both the United States and the United Kingdom – have now been in place for 25 years and 19 years respectively. Although the Model Law and the Regulation have different scopes and purposes, they are similar in that both were specifically adopted to ensure that the necessary framework was in place so that cross-border insolvency proceedings could be conducted in an efficient and effective manner while also promoting fairness and transparency. In order to further this goal, both the Model Law and Regulation provide for automatic or simplified recognition of cases pending in jurisdictions that are signatories to or subject to the applicable legislation.
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