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Scientific reports of Bukhara State University

Abstract

Introduction. This Article is a detailed analysis of one of the most complex and landmark judgments in the area of cross border group insolvency. It traces the timeline of the insolvency of Nortel Plc. and the simultaneous proceedings in multiple jurisdictions. Introduction followed by Literature Review. Research methods are exploratory in nature, since the study has to explore a case of the simultaneous proceedings in multiple jurisdictions. Results and discussions. The Article discusses that there are two major methods for dealing with corporate groups undergoing insolvency, which are: Procedural Coordination and Substantive Consolidation. Under such mechanisms which little to no precedence in any jurisdiction, this case carved out its own path to arrive at the outcome of Pro-Rata Allocation. The case is significant for being heard at the same time in two courtrooms, one in Delaware and one in Ontario, that were linked in order to receive live evidence together. This Article discusses the importance and significance of having a cross border group insolvency regime in place. In the era of Globalisation, the integration of national economies into a global economic system has been one of the most important developments of the last century. Globalisation has resulted in improving international trade drastically. It has resulted in higher inter connection and awareness of opportunities and now investors can access new business opportunities across the Globe. Investors invest in corporate debtors of different jurisdictions which lead to so many risks. Foreign investors take into consideration various factors while investing in a country and strong insolvency laws is one of the factors. Every foreign investor would like to protect his rights when the company becomes insolvent and at that point the cross border insolvency law will come into picture. Cross Border Insolvency laws deals with insolvency of companies which operates in more than one jurisdiction. Conclusions. This case is a significant milestone in cross-border group insolvency that set the precedence for finding innovative solutions without disturbing the sanctity of the legislations in place, for the benefit of the stakeholders involved, that resulted in maximum returns for the claimants of the Group.

First Page

150

Last Page

161

DOI

10.52297/2181-1466/2021/5/4/14

References

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