1. OBJECTIVES OF INSOLVENCY REGULATION
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The principles of territoriality and universality have been defended and challenged
on a wide variety of rationales. Not infrequently, arguments have been framed in terms
which are meaningful in national legal doctrine and tradition but of limited use outside
national discourse. The characterisation of insolvency proceedings as either belonging
to the statuta personalia or statuta rcalia is a clear example, for instance, Belgium's
tendency towards universality in cross-border insolvency law has been motivated by
classifying insolvency law as belonging to the former.1 According to English conflicts
doctrine, the rule of mobilia personam seqiiiintnr-in conjunction with the characterisation
of individual insolvency as an assignment by law - has resulted in the rule that foreign proceedings over individuals result in an automatic transfer of all the debtor's
interests in all movable property wherever located to the foreign trustee.' As it happens,
the United States Supreme Court's characterisation of insolvency law as an assignment
bv law produced exactly the opposite result. In Harrison v Sterry it held that 'the
bankrupt law of a foreign country is incapable of operating a legal transfer of property
in the United States'."
To gain a general understanding of the basic cross-border insolvency dilemma and
the traditional principles of territoriality and universality, the discussion should start
with a more functional approach to cross-border insolvency. It is therefore appropriate
to begin by describing the main objectives of insolvency law.