Bank insolvency
As the major (English) trading creditor of the London branch of a troubled bank registered and with its principal operations and headquarters in Switzerland but with other branches in a variety of largely offshore jurisdictions, what insolvency process would you seek to have employed in which jurisdiction in order best to protect your interests? The majority of the bank's assets are in England and you fear that without proper control being exercised they might be dissipated in the impending collapse.
Comments (3) Read through and enter the discussion with the form at the end
My gut feeling would be to take protective injunctive relief in the English courts to protect the assets under existing insolvency provisions.
With the UK having recently acceded to the the UN convention, the worldwide creditors would be fairly treated pari passu, and the UK would have jurisdiction under the COMI principle.
However it would be moot to see if the Swiss recognised the treaty provisions. It does not currently automatically recognise UK court judgments.
In the alternative, given the allusion to a variety of offshore jurisdictions, it may be also worthwile seeking a worldwide mareva injunction in conjunction to the protective insolvency procedings. This is recognised as effcetive in all the EU and a number of the offshore tax havens including the Channel Islands, Gibralter, the British Caribean territories and the Dutch Antillies. The USA has also recognised enforcement of a mareva injunction, which covers most of the major financial markets.
Apply for a UK Administration Order
Glyn
A good, strong reaction! The hypothesis did refer to dissipation of assets, but I wonder whether one wouldn't need something more than a fear of such action, particularly given the indemnity you would be required to give and the huge potential claims that might arise in a banking environment.
I had in mind some form of English insolvency proceedings, perhaps provisional liquidation, since administration is only available to UK and EC/EEA companies (see para 111(1A), Sch B1, Insolvency Act 1986 - and a s8 "old style" administration is limited to companies onder s735 Companies Act 1985) and the company's COMI (to the extent that concept is relevant) is in Switzerland. Persuading the Financial Services Authority to join in the petition might be a good wheeze as it's a bank we're dealing with.
Chris