The Retrogressive Flaw of Chapter 15 of the Bankruptcy Code: A Lesson from Maritime Law
![handle is hein.journals/djcil17 and id is 257 raw text is: THE RETROGRESSIVE FLAW OF CHAPTER 15
OF THE BANKRUPTCY CODE: A LESSON
FROM MARITIME LAW
JOHN J. CHUNG*
INTRODUCTION
Chapter 15 of the U.S. Bankruptcy Code became law in October
2005. It governs transnational bankruptcies and is designed to propel
bankruptcy law into the new age of global economic activity
conducted by multinational companies. According to Chapter 15's
supporters, modern day corporations do business throughout the
world, and debtors and creditors need a structure that can provide
greater certainty and predictability in the event of bankruptcy by a
multinational debtor. At this time, the scope and contours of the new
law are still untested and unknown. Its first few years will likely
generate a struggle between those who have a more traditional view
of bankruptcy law and those whose goal is to internationalize it, with
the two sides seeking to narrow or expand the meaning and
application of Chapter 15. This struggle will be a continuation of the
debate between the two competing and polar models of transnational
bankruptcy law-territorialism and universalism.
Chapter 15's proponents designed it with a view to promote
universalism. Universalism involves one court in one country taking
control of a multinational bankruptcy and applying its domestic
bankruptcy law to all of the debtor's assets and creditors worldwide.
Universalism takes the view that in the event of bankruptcy by a
multinational debtor, the entire bankruptcy proceeding should be
governed by the court and bankruptcy law of the country that is the
center of its [the debtor's] main interests (its home country, in
Copyright © 2007 by John J. Chung.
* Associate Professor of Law, Roger Williams University; B.A. 1982, Washington
University (St. Louis); J.D. 1985, Harvard Law School. I am especially grateful to my colleague,
Jonathan Gutoff, whose amicus brief in support of the prevailing party in Spector v. Norwegian
Cruise Line Ltd. provides the foundation of this article regarding the maritime law issues. I also
thank Lynn LoPucki for his comments on an earlier draft, and for his continuing graciousness
and support.](ViewImageLocal?handle=hein.journals/djcil17&div=13&collection=journals&method=preview&ext=.png&size=3)
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The Retrogressive Flaw of Chapter 15 of the Bankruptcy Code: A Lesson from Maritime Law
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