International Bankruptcy: Comparative study

An important aspect of the Model Law is the provisions enabling a foreign representative such as an overseas liquidator, to apply to a court in a country such as Australia where the Model Law has been enacted, to obtain recognition by that court of a foreign insolvency law proceeding in which the foreign representative has been appointed or authorised to act. By obtaining recognition under the Model Law, a foreign representative can seek from the court a range of orders available under the Model Law to assist the representative in carrying out a cross-border reorganisation or liquidation of a corporation or individual debtor's assets.

Both the BIA and the CCAA provide a mechanism for the coordination of cross-border insolvencies similar to Chapter 15 of the US Code ("Chapter 15"). Under these provisions, Canadian courts may, among other things, recognize insolvency proceedings commenced in foreign jurisdictions.

These rules provide the legal framework for determining
which country’s insolvency law should apply and how the
insolvency laws of different interested jurisdictions
should interact. They do not contain substantive
insolvency laws, as these are left to the local jurisdiction
(in England, principally the Insolvency Act 1986).