Offshore, But Not Off-Center

The recent insolvencies of offshore-based mutual funds have presented challenges for international comity when it comes to the complex issues of cross-border insolvency. One of the most important challenges is the degree to which the courts of one jurisdiction will recognize and assist the representatives of insolvency proceedings in another jurisdiction. This is particularly important in the context of offshore funds, which typically have investments, investment managers and investors located throughout the world, including the United States. This article considers recent developments in the approach of the U.S. Bankruptcy Courts to the recognition of insolvency proceedings commenced with respect to funds in foreign offshore jurisdictions; and in particular the approach taken in the recent case of Millennium Global Emerging Credit Master Fund Limited (SDNY 11-13171, Gropper J, 26 Aug. 2011).