CORPORATE MIGRATION IN CROSS-BORDER BANKRUPTCY
Elena V. Sitkareva1*, Yulia A. Artemyeva2, Svetlana Mendosa-Molina3
1PhD in Law, Prof., RUDN University, RUSSIA, sitkareva_ev@rudn.university
2 Ph.D. inLaw, Prof., RUDN University, RUSSIA, artemyeva-yua@rudn.ru
3Senior Lecturer, RUDN University, RUSSIA, svs3.75@mail.ru
*Corresponding author
Abstract
The article deals with cases of changing the national identity of an entity in order to choose a more favorable jurisdiction for conducting the bankruptcy procedure when it affects the rights and interests of parties from different countries. As a rule, cross-border insolvency is more associated with the insolvency of companies that operate in more than one country, rather than with the bankruptcy of individuals. Ideally, a country should be identified as the most appropriate jurisdiction to conduct the proceedings, and all other states will cooperate in such procedures and facilitate them (taking into account the limitations of public policy).
The legal regulation of the European Union and the USA, representing the most striking examples of legal instruments that allow to select the forum shopping for cross-border bankruptcy was chosen as the basis for this research. However, this freedom of choice affords grounds to individual countries to abuse the law. The problem of abuse of the right to choose the jurisdiction within the framework of the forum shopping requires analysis on various criteria. It is required to find the balance of protection of interests of creditors and interests of the debtor in corporate migration in cross-border bankruptcy. The analysis of the revealed advantages and shortcomings in the implementation of the considered legal norms in practice will make it possible to distinguish the main international legal trends in the formation of legal regimes for recognising foreign bankruptcies in the context of the choice of convenient jurisdiction.
In the article, the authors provide examples from normative acts of various states, as well as international legal acts, examples from law enforcement practice. On the basis of the identified issues, ways of overcoming these problems are being suggested.
The outcomes of the article may be useful for lawyer students, practising lawyers as well as legislators.
Keywords: bankruptcy procedure, law enforcement practice, cross-border insolvency, forum shopping
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