On Pari Passu, Equality and Hotchpot in Cross-Border Insolvency
19 Pages Posted: 12 Mar 2003
The Privy Council decision in Cleaver v. Delta American Reinsurance confirmed the ingrained academic view that the application of the hotchpot rule in cross-border insolvency is underpinned by the principle of pari passu distribution. This paper ventures to uproot that ingrained view and demonstrate that the rationale behind the hotchpot rule has nothing to do with the pari passu rule. In addition, it will be shown that the substantive decision in Cleaver v. Delta American Reinsurance is untenable owing to a serious misunderstanding of No. 1213 of the New York Insurance Law.
Keywords: Pari passu, hotchpot, New York Insurance Law, pre-answer security, cross-border insolvency, bankruptcy, equality, priority, distribution policy, international insolvency
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