July 7 - Members and Subscribers - Welcome to the new and improved abi.org! - If you have not already done so, please reset your ABI password to access the site. Click "Login" and then "Forgot Password"
There have been several articles recently published discussing and critiquing the early chapter 15 case law. [1] However, two articles in particular are worth noting. The first is entitled "A Tale of Two Proceedings: ‘Turnabout Is Fair Play’ in the Yukos U.S. Bankruptcy Cases," which discusses some of the intriguing issues presented by the Yukos chapter 11 and chapter 15 cases and their implications for future cross-border restructurings. [2] Addressing Yukos, author Kurt A.
The reform of Canada’s insolvency laws continues to move forward slowly. In an article published in a previous edition of this newsletter, I outlined the proposed amendments to Canada’s two major insolvency statutes, the Bankruptcy and Insolvency Act (BIA) and the Companies’ Creditors Arrangement Act (CCAA) under Bill C-55.
By all accounts the Chinese Bankruptcy Law needed reform, and on June 1, 2007 the new bankruptcy law will take effect. Although the old law will still apply to state-owned enterprises (SOEs) until 2008,1 some experts believe the SOE exception for SOEs will be extended beyond 2008.
The ever-growing proliferation of international trade and the rise of increasingly large transnational corporations means that whenever the next big downturn overtakes us, there will be an unprecedented level of transnational insolvency proceedings. This, in turn, will likely result in a number of unprecedented legal issues that will need to be resolved through a patchwork of overlapping (and potentially contradicting) international treaties, country-specific laws, and established practices relating to international law.
China’s market-oriented reform has generally been successful since it started in the late 1970s. However, the transition of its corporate and financial sectors has suffered greatly from the absence of a functioning insolvency regime. While a trial bankruptcy law was adopted in 1986 and took effect in 1988, it covered only state-owned enterprises (SOEs), which now account for only about one third of the country’s total output. Non-state-owned enterprises have been left to a set of simple insolvency rules of the Civil Procedure.
On Aug. 27, 2006, the People’s Republic of China passed a new bankruptcy law that will become effective on June 1, 2007. The concept of bankruptcy law is not new in Chinese law. The first bankruptcy law, called the “Qing Law,” dates from 1906, near the end of Qing dynasty. Before that, the issue was governed by an ethical precept, according to which “the debts of the father are to be paid by the son.” But the Qing Law had a short duration and was abolished with the fall of the empire around 1912.
As a general matter, the attorney-client privilege is perceived as an almost bullet-proof wall against disclosure of client communications. This perception rests largely on the often unstated assumption that the corporate entity will continue to operate as a going-concern and desires to maintain the confidentiality of its communications. Bankruptcy, however, fundamentally alters that assumption.
Not only has the last year been marked by a new Canadian government under the leadership of conservative Prime Minister Stephen Harper, it has also brought about significant revisions to Canada’s federal insolvency statutes.
In the fall of 2003, the Canadian Senate’s Banking, Trade and Commerce Committee completed its five-year review of insolvency legislation and delivered a detailed series of recommendations for reform. Many of the proposed recommendations were incorporated into Bill C-55, which was tabled in the Canadian House of Commons in June 2005.
