Call for worldwide insolvency standards.
A leading body of insolvency practitioners has highlighted the need
LetsBuyIt.com, an online retailer, faced bankruptcy procedures last Thursday, but was rescued by a German venture capitalist. The UK company is based in Holland, but is listed in Frankfurt.
‘Life would be easier if all nations adopted the United Nation’s UNCITRAL Model Law on cross-border insolvency,’ said INSOL International president Neil Cooper. He added: ‘The law provides a gateway for practitioners appointed in one country to obtain assistance in other countries, with view to work being carried out.’
Only three countries have adopted the law since its inception in 1997.
A similar problem is being faced by speech recognition software specialist Lernout & Hauspie – headquartered in the United States and Belgium – which filed for insolvency protection in two countries. It was granted Chapter 11 in the US, but had to apply twice in Belgium before being granted a moratorium, leaving American creditors at a disadvantage.