National Corporate Law in a Globalised Market

National Corporate Law in a Globalised Market

The UK Experience in Perspective

Corporations, Globalisation and the Law series

David Milman

In this timely book, David Milman considers how UK corporate law has been affected by the forces of globalisation, arguing that this is not a new development, but rather is part of an historical continuum. He examines corporate law regulatory strategy in general, treatment of foreign shareholders and multinational groups, aspects of private international law and issues connected with cross border insolvency.

Chapter 8: Dealing with transnational coporate collapse

David Milman

Subjects: law - academic, company and insolvency law, private international law


8. Dealing with transnational corporate collapse Transnational business failure is not a new phenomenon,1 but it is much more common these days and the economic disruption caused and the legal problems generated can be immense. It is incumbent on any national system of corporate law to provide an effective working set of rules to manage such a crisis. Increasingly, it is seen as a necessity for the international corporate law community to contribute to providing effective working solutions.2 Recent examples of transnational collapses or comparable incidences of global/overseas firms’ experiencing financial distress that have posed challenges for English law include BCCI (1991),3 Maxwell Communications Corporation (1991),4 Barings (1995),5 Enron (2001),6 Federal Mogul (2001)7 Historical examples of such cross-border insolvencies would include the Scali bankruptcy in 1326 – see D. Graham [2000] 13 Ins Intell 36. 2 For scholarly analysis of the problems associated with cross-border insolvency, see P. St J. Smart, Cross-border Insolvency (1992) (Butterworths), K.H. Nadelmann (1944) 93 Univ of Penn L Rev 58, P. St J. Smart [1999] Ins Law 12, P. Omar (2006) 22 IL & P 132. For an historial perspective, see D. Graham (2001) 10 Int Ins Rev 153. 3 BCCI was a bank whose activities spanned the globe. See N. Kochan and B. Whittington, Bankrupt: The BCCI Fraud (1991) (Victor Gollancz Ltd) for the essential details of this unprecedented financial scandal, which produced a huge volume of reported litigation. See also A. Arora [2006] JBL 487 for the regulatory lessons....

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