Document Type

Article

Publication Date

2007

Abstract

A decade ago, in 1996, the landscape of transnational insolvencies was vastly different from today. The UNCITRAL Model Law had not been finished, the efforts at the E.U. Insolvency Treaty were jeopardized by mad cows, and no one had heard of Chapter 15. Now, all three universalist projects are up and running, putting universalism in a comfortable state of ascendancy. The paradigm has not been without critics, however, the most persistent and eloquent of which has been Professor Lynn LoPucki. LoPucki has periodically attacked universalism on a number of grounds. These grievances include a sovereigntist complaint of universalism's insensitivity to the differences in local bankruptcy laws (a refrain now picked up in the recent writings of John Chung), as well as an operational skepticism regarding universalism's capacity to consolidate corporate groups (which is further explored by Irit Ronen-Mevorach). There is also his argument regarding universalism's inability to pick a jurisdiction-selecting choice of law rule, although the increasing prevalence of the center of main interests (COMI) test has undermined this pessimism somewhat. But the most vociferous attack of late-perhaps inspired by LoPucki's path-breaking work on domestic forum shopping-revolves around universalism's purported potential to facilitate, and even exacerbate, what he denigrates as transnational bankruptcy "forum shopping." Indeed, this allegation prompted a spirited written debate just last year between Professor LoPucki and Ninth Circuit Bankruptcy Judge (and scholarly author) Samuel Bufford in the pages of the American Bankruptcy Law Journal. The purpose of this Article is to take issue with LoPucki's characterization of universalism as a harbinger of rampant forum shopping. This is not to imply that Judge Bufford's response was lacking. On the contrary, Bufford makes some excellent points and, even more interestingly, proposes specific doctrinal recommendations to shore up the areas where universalist instruments might tempt forum shoppers. The goal of my contribution to the literature is to take a slightly broader, more theoretical response than Bufford's in defending universalism against accusations of fostering forum shopping. I also take a more pointed stance by contending that not only is universalism's capacity to encourage forum shopping misunderstood and overstated-a myth-but that territorialism's potential for forum shopping has hitherto escaped unnoticed and may be much worse.


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