Speaking to the Accountancy Age news service last week, insolvency expert Stephen Grant suggested that the bankruptcy 'jurisdiction shopping' undertaken by ailing Russian oil firm, Yukos may have given UK businesses that are in financial dire straits similar ideas.
Despite its firmly Russian status, Yukos sought Chapter 11 bankruptcy protection in the United States late last year, claiming establishment of jurisdiction in Houston on the grounds that it had a bank account there, and that its chief financial officer, Bruce Misamore had recently moved to the state.
Mr Grant, who works in the business recovery department of Wilkins Kennedy, observed that US Chapter 11 bankruptcy regulations are likely to appeal more to businesses than European bankruptcy regulations, as they allow directors to retain control of the company, rather than handing it over to administrators.
"There are regulations governing how directors in charge of bankrupt companies in the US should act, but it seems that Yukos filing for bankruptcy in the US was a case of jurisdiction shopping," he explained, continuing:
"The company looked around for the most favourable bankruptcy regulations to protect its assets. This ruling could see UK companies doing the same thing."
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