Creditor Equality in Inter-State Bankruptcies: A Requisite of Uniformity in the Regulation of Bankruptcy

With growing intercourse between nations, bankruptcies with assets in more than one country become more frequent. Extended inter-Hemisphere trade leads also to more bankruptcies with assets dispersed over the Hemisphere. Neighbor states are involved in the first place, and countries with extensive foreign trade. The difficulties arising in such inter-state bankruptcies are often great because of the conflict of jurisdictions and of laws. Lack of uniformity in the regulation of bankruptcy shows its disadvantages in such instances. Differences in the law necessarily complicate jurisdictional conflicts. When the priorities-for wages, taxes, and so forth-are not the same, when the rules on voidable preferences differ, when not the same classes of claims are excluded from proof, an assumption of jurisdiction over the local assets may be indispensable to secure for the interested parties the benefit of the local law. Uniformity of the law, on the other hand, makes the exercise of this right exclusively a matter of practical considerations-provided of course no differentiation is intended between domestic creditors and creditors from abroad. Cases where practical considerations do not ask for several administrations arise in sufficient number, especially between neighbor states, to make their disposition in a cheap and efficient way a matter of justified concern.