TY  - JOUR
AU  - Bebchuk,Lucian Arye
AU  - Guzman,Andrew T.
TI  - An Economic Analysis of Transnational Bankruptcies
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6521
PY  - 2000
Y2  - March 2000
UR  - http://www.nber.org/papers/w6521
L1  - http://www.nber.org/papers/w6521.pdf
N1  - Author contact info:
Lucian A. Bebchuk
Harvard Law School
1545 Massachusetts Avenue
Cambridge, MA 02138
Tel: 617/495-3138
Fax: 617/812-0554
E-Mail: bebchuk@law.harvard.edu
AB  - This paper analyzes the effects of the legal rules governing transnational bankruptcies.  We compare a regime of  territoriality' -- in which assets are adjudicated by the jurisdiction in which they are located at the time of the bankruptcy -- with a regime of universality are adjudicated in a single jurisdiction.  Territoriality is shown to generate a distortion in investment patterns that might lead to an inefficient allocation of capital across countries.  We also analyze who gains and who loses from territoriality, explain why countries engage in it even though it reduces global welfare, and identify what can be done to achieve universality.
ER  -