Directors and officers of multinational companies considering restructuring should be aware of the viability of using Chapter 11 of the United States Bankruptcy Code to effectuate a successful financial or operational restructuring. Chapter 11 provides key advantages for a debtor compared to local insolvency policies in other countries. Directors should understand that their fiduciary duties when a company approaches insolvency or is insolvent may vary across jurisdictions, and that consideration must be given to the local regulatory environment in terms of planning a successful restructuring. There is a strong precedent of foreign directors and senior management approving Chapter 11 filings as the best available alternative.
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