Inconsistency between cross-border corporate insolvencies

Inconsistency between cross-border corporate insolvencies

One of the major issues arising in cross-border or international insolvency is the local recognition and effect of concurrent foreign insolvency proceedings. As a foreign company may be wound up in Australia (see Pt 5.7 and Pt 5B.2 of the Corporations Law), a local liquidation may be taking place when the company is also being wound up in its place of incorporation. If this occurs, the foreign winding up is regarded as the principal winding up and the local one as merely ancillary: Re English Scottish & Australian Chartered Bank [1893] 3 Ch 385 . The local ancillary winding up concentrates on getting in and realising local assets and may result in funds being remitted to the principal winding up for distribution. If any issue in the local winding up comes before the local court, it must apply local law, including local insolvency law, to its resolution: Re Bank of Credit and Commerce International SA (No 10) [1997] Ch 213 .

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