By Jayanth Krishnan (Indiana—Bloomington)
In 2009, as markets from the United States to Europe to the Global South shook, one country—the United Arab Emirates—found itself on the brink of economic collapse. The U.A.E’s Emirate of Dubai was contemplating defaulting on $60 billion of debt it had amassed. Recognizing that such a default would have cataclysmic reverberations across the globe, the government of Dubai turned to a small group of foreign consultants for assistance. The resulting legal experiment demonstrates how aspects of American corporate bankruptcy law can be imported into and prove useful in the context of a foreign legal tradition. During the crisis, insolvency lawyers from the U.S. law firm of Latham & Watkins, analysts from the New York-based investment bank Moelis, and accountants from PwC – together with local domestic counterparts and experts from the U.K.– devised a highly sophisticated plan that helped the Emirate address the economic crisis in which it found itself. As part of this plan, Chapter 11 and Chapter 15 principles from the U.S. Bankruptcy code, the 2/3 cram down technique on hold-out creditors, and an Anglo-American insolvency tribunal were introduced into Dubai in order to bring about economic stability and handle the highly complex cases that arose during the financial crisis. By respecting and interpreting U.A.E. law, the tribunal has maintained its legitimacy in the eyes of the Dubai government even as it has drawn on Anglo-American insolvency concepts.
On December 13, this study will be formally presented at a public event in Dubai by Indiana-Bloomington’s Center on the Global Legal Profession, where insolvency experts and policymakers from the U.S., Dubai, and the U.K. will be present.
The full article can be found here.