3 . 4 . D E P L O Y M E N T AND D I S T R I B U T I ON

The focus of the paradigm is efficiency rather than equity; deployment rather than

distribution. Considerable gain in efficiency may be achieved even by 'low-intensity'

co-operation."'" Without relinquishing any effective control over local assets, jurisdictions

may, by co-ordinating their proceedings, reduce administrativeexpen.se and

increase (though not optimise) the going concern value of the debtor's estate.

The recent cross-border insolvency protocol for The Laewen Croup hie. (TLGI) may

serve as an illustration. '' TLGI was a company incorporated in Canada, British

Columbia, with several subsidiaries in both Canada and the United States. In an attempt

to reorganise, 77.GV and several of its United States subsidiaries commenced

proceedings under chapter 11 ofthe United States Bankruptcy Code 1978 in Delaware.

Simultaneously, 77G7 and certain of its Canadian subsidiaries obtained an order commencing

proceedings under the Canadian Companies' Creditors Arrangement Act

1992. The protocol submitted to the courts for approval aimed to 'lp]romote orderly

and efficient administration ofthe proceedings to, among other things, maximise the

efficiency ofthe insolvency proceedings, reduce costs associated therewith and avoid duplication of effort'; and to 'facilitate the fair, open and efficient administration ot

the insolvency proceedings tor the benefit of all of the debtor's creditors and other

interested parties, wherever located'. " At the same time, these objectives were to be

pursued on the basis that nothing in the protocol was to be construed to 'increase,

decrease or otherwise modify the independence, sovereignty or jurisdiction' ot the

United States and Canadian Court nor 'preclude any creditor or other interested party

from asserting such party's substantive rights under the applicable laws ot the United

States, Canada or any other jurisdiction'.-'"'

In this respect it is important to note a certain tendency to distinguish between

distribution and deployment for the purposes of co-operation. The Model Law

expressly separates the turn-over of assets for administrative purposes and for

distributive purposes. In doing so, it recognises that the two main questions of insolvency

law - deployment and distribution - do not necessarily require the same approach

or solution in a cross-border context, full co-operation in deployment, and

thus the optimisation of proceeds through universality, may be feasible - even if as

far as distribution is concerned the assisting forum acts in accordance with local law.

In fact, distribution in insolvency cases is less suited to co-operation between jurisdictions.

' It is, however, not true that no co-operation at all takes place with respect

to distribution, or with distributional consequences. This is already implicit in the

Bankruptcy Code's criterion that distribution be 'siibstantially'm accordance' with US

law, rather than being identical to US law.' '* Other examples can be cited. For instance,

in Scfcl (h'opliysical Ltd. a Canadian court recognised United States revenue claims.

Most of the assets in the Canadian proceedings were available by virtue of the action

of the United States court in granting a stay of proceedings in the United States. T he

United States court had done so on the assumption that the United States claims would

be recognised. ' Although neither (ianadian law nor comity would require it do so,

recognition was therefore nevertheless appropriate in the court's view.

Idem, para. :s.

litem, para. 8.