United States: Courts, Cooperation, And More: A Review Of Cross-Border Insolvency Protocols

In Short

The Situation: For cross-border insolvency matters, parties increasingly depend on court-approved protocols to assist in the management of complex insolvencies involving a debtor or debtors whose assets, liabilities, or operations span international borders.

The Action: Courts in Bermuda, the British Virgin Islands, Singapore, the United Kingdom, and some U.S. bankruptcy districts have implemented Guidelines for Communication and Cooperation between Courts in Cross-Border Insolvency Matters.

The Overview: Protocols introduced during the past 15 years tend to include similar procedural and administrative provisions, mostly designed to promote efficient and effective case management.

In cross-border restructuring cases, including cases under chapter 15 of the U.S. Bankruptcy Code and versions of the UNCITRAL Model Law on Cross-Border Insolvency enacted in 42 other nations or territories, interested parties increasingly rely on court-approved insolvency protocols to aid in managing complex insolvencies involving debtor(s) whose assets, liabilities, or operations span international borders. These protocols facilitate communication between U.S. and foreign courts and standardize certain common procedures, while simultaneously protecting each nation's sovereignty.

Earlier this year, courts in Bermuda, the British Virgin Islands, Singapore, the United Kingdom, and certain U.S. bankruptcy districts formally implemented Guidelines for Communication and Cooperation between Courts in Cross-Border Insolvency Matters designed, among other things, to improve the effectiveness of cross-border restructuring protocols. Such protocols, which generally have a common, recognized structure, apply to private-sector cross-border restructurings or insolvencies, as distinguished from sovereign or public-sector restructurings, which are more sui generis and variable.

A recent survey of protocols implemented during the past 15 years indicates that although protocols can vary in certain case-specific content, each protocol contains similar procedural and administrative provisions designed to promote efficient and effective case management. Common provisions include, among other things, the following.


Protocols begin with a brief overview of the parties bound by the protocol, the courts involved, pending insolvency proceedings regarding the debtor(s), and any additional relevant information on the general corporate structure of the debtor(s).

Purpose and Goals

Protocols establish the premise for their creation and outline the goals the parties hope to achieve. The parties will articulate how courts will coordinate, recognize each other's orders under principles of comity, efficiently administer the cases, and establish a framework of general principles to address basic administrative issues that are involved in complex cross-border cases.

Comity and Independence of Courts

Because insolvency laws are not standardized across international borders, protocols will devote a section to recognizing each relevant jurisdiction's independence. The protocol will outline the substantive law that is not addressed by the protocol and emphasize that the protocol is not intended to modify any jurisdiction's sovereignty or jurisdiction.


Protocols will provide rules or guidelines on how the parties and courts involved should work together to effectively administer the insolvency proceedings. Although a protocol may include broad language requiring the parties to take reasonable steps to coordinate the administration of the cases, the protocol can also include more specific instructions, such as the requirement that the courts involved regularly communicate with each other or hold joint hearings on certain issues.

Recognition of Stays of Proceedings

Each court involved will recognize the injunctions or stays arising under each country's respective laws. Protocols usually preserve the rights of interested parties to challenge the applicability of any stay before another tribunal. Some protocols may even allow the courts to consult with each other as to the applicability of the stay on a particular issue.

Right to Appear and Be Heard

Standing provisions are common. These provisions may confer standing to be heard upon parties in multiple jurisdictions, subject to applicable local rules and regulations. However, a foreign court typically will not have personal jurisdiction over individual members of a creditors' committee even if the committee itself has standing in a foreign court.

Retention and Compensation of Representatives and Professionals

Protocols typically confirm that the adjudication of compensation of professionals, monitors, or representatives is subject to the exclusive jurisdiction of the appointing court.


To ease case administration, each protocol sets forth standard notice procedures governing the insolvency proceedings.

Effectiveness and Modification

Each protocol states that it is binding only if approved by the relevant courts. A protocol also notes whether it can be modified in specific instances. Typically, an amendment or supplement requires the approval of each court involved after notice and a hearing.

Procedures for Resolving Disputes

Protocols contain language requiring the parties to petition one (or all) of the courts involved to resolve disputes. Additionally, a protocol may instruct courts on the procedures they should follow to resolve disputes, such as by consulting with the other court(s), entering a binding decision after consultation, or holding joint hearings with the other court(s).

Preservation of Rights

A protocol often expressly limits its effect on specified parties.

* * *

In addition to these standard provisions, protocols may include case-specific provisions, such as rules governing distributions to creditors in each jurisdiction and confidentiality provisions to be enforced across international borders.

Two Key Takeaways

  1. Cross-border insolvency protocols specify similar procedural and administrative provisions designed to facilitate case management, establishing a framework of principles addressing administrative issues involved in complex cases.
  2. Common provisions include sections recognizing each relevant jurisdiction's independence, rules on how the parties and courts should work together, acknowledgments of the injunctions or stays arising under each country's respective laws, and similar stipulations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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