Abhorring the lack of international comity requirements for insolvent entities in a world increasingly reliant on globalized commerce;
Fearing that such a lack may allow debtors to evade creditors by shifting assets across international borders, both hindering commerce and increasing the transactional cost of commercial and consumer bargaining;
Believing that bankruptcy is a tool that protects debtors from insolvency and permanent barriers to obtaining consumer credit and creditors from losing any opportunity for remuneration;
Asserting that no loss of sovereignty truly occurs by extending the courtesy of comity to fellow members of the World Assembly, as all states benefit equally from extension;
The World Assembly enacts the following:
- “Bankruptcy” is a legal process overseen by a court or trustee that reorganizes or discharges debt meant to satisfy creditor claims while protecting debtors from extended insolvency and compounding debt.
- A “foreign representative” is a person or persons authorized to appear on behalf of a nongovernmental debtor or creditor to represent the debtor or creditor’s interests in a foreign bankruptcy proceeding.
- Member states must establish a judicial or administrative procedure to aid foreign representatives in recognizing and enforcing the applicable foreign bankruptcy laws over fiscal assets within the territorial jurisdiction of that member state.
- Member states may require a reasonable analysis of the debtor’s ties to the host jurisdiction and to the foreign jurisdiction to determine whether extending bankruptcy comity is appropriate.
- A reasonable analysis may inquire into:
- The proportion of assets within the host jurisdiction as compared to those in the foreign jurisdiction;
- The length of time those assets have been within the host jurisdiction; and
- Any other factor which the member state feels relevant and that facilitates fair and efficient bankruptcy procedures in conformity with the implicit goals of this resolution.
- Notwithstanding foreign bankruptcy law, member states must:
- Enforce a mandatory stay of any creditor claims against the debtor’s assets within member state jurisdiction pending conclusion of the bankruptcy process if member states have extended comity under Clause 3, except for government liens meant to collect unpaid taxes; and
- Supply court records pertaining to ongoing proceedings and past bankruptcies on request by a party or government involved in the instant bankruptcy proceeding.
- Member states may charge foreign representatives reasonable administrative or court fees, commensurate with domestic fees for similar work, when enforcing foreign bankruptcy comity claims.
- No member state may treat the failure to obtain bankruptcy comity as having a preclusive effect on later domestic claims by either creditors or debtors.
- Member states may enforce a time limit on the number of separate bankruptcy comity claims a court may enforce for a debtor.
- Nothing in this resolution mandates the extension of comity to non-member states.
