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13 Bankr. Dev. J. 163 (1996-1997)
Handling Priority Rules Conflicts in International Bankruptcy: Assessing the International Bar Association's Concordat

handle is hein.journals/bnkd13 and id is 181 raw text is: HANDLING PRIORITY RULES CONFLICTS IN INTERNATIONAL BANKRUPTCY: ASSESSING THE INTERNATIONAL BAR ASSOCIATION'S CONCORDAT I. INTRODUCTION In In re Hackett,' the Bankruptcy Court for the Southern District of New York faced a problem often encountered in bankruptcy pro- ceedings which span national borders: a creditor alleged that a for- eign country's proceeding would unfairly lower the priority of his secured claim relative to other creditors, thereby lowering his even- tual distribution.' The court cited the International Bar Association's Draft Cross-Border Insolvency Concordats as an initia- tive serving to give guidance for the treatment of cross-border prob- lems,4 and appeared eager to conform its holding to the principles of the Concordat.5 The Concordat represents the state of the art in attempts to instill in the international bankruptcy community high-minded inter- ests in the orderly resolution of debtors' estates above the sovereign- ty-driven, conflict-laden system which has dominated courtrooms in the past.' But in its endeavor to promote a one-world view in inter- national bankruptcy practice, the Concordat treads on the tradition- ally sovereign function of defining priorities vis-a-vis secured credit and tax claims. Of course, many problems accompany international ' 184 B.R. 656 (Bankr. S.D.N.Y. 1995). 2 See id. at 659. ' Mike Sigal et al., The Law and Practice of International Insolvencies, Including a Draft Cross- Border Insolvency Concordat, in ANNUAL SURVEY OF BANKRUPTCY LAW 1 (William L. Norton, Jr. et al. eds., 1994) [hereinafter Concordat]. The International Bar Association (IBA) and the edi- tors who were recruited both to present the Concordat and to provide rationales for each principle, id. at 2, will be subsequently referred to as the drafters. 4 Harkt4 184 B.R at 658 (citing 6A NORTON BANKRUPTCY LAW AND PRACTICE 2d § 152:66, at 152-56 (William L. Norton, Jr. et al. ed, 1994). ' The court noted that although its conclusions are supported by the facts and law set forth in this Discussion section, the outcome is consistent with the principles developed in the Concordat. Id. at 659 n.4. 6 See infra notes 77-78 and accompanying text.