"The past decade has seen an explosion in the complexity and globalisation of debt finance, creating global companies with assets and creditors in multiple jurisdictions, which are subject to multiple legal frameworks.
Kon Asimacopoulos, partner at Kirkland & Ellis, says there is now a steady stream of companies that have acquired businesses in various countries and now are facing financial difficulties.
'The different cross-border recognition regimes work most effectively when you have the luxury of time to plan,' he says. 'However, when multinational companies are running short of liquidity, the insolvency related duties of directors differ across jurisdictions, increasing the risk that local directors will file for insolvency before a restructuring can be effected.' "
This article appeared in its entirety in the February 20, 2009 edition of Financial Times.