The European Union goes Comi-tose: hazards of harmonizing corporate insolvency laws in the global economy.

(202.) See 11 U.S.C.A. [section][section] 1502, 1516 (West Supp. 2006) (discussing the treatment for a foreign main and foreign non-main proceeding); see, e.g., In re SPhinX, 351 B.R. 103, 111-22 (Bankr. S.D.N.Y. 2006) (attempting to define COMI under Chapter 15). See generally Glosband, supra note 79 (criticizing the SPhinX court's analysis of COMI under Chapter 15).

(203.) See In re Aerovio Nacionales de Colombia S.A. Avianca, 303 B.R. I, 18 (Bankr. S.D.N.Y. 2003) (noting that courts may defer to the center of gravity, if ascertainable). Under a center of gravity analysis, a court will determine the controlling jurisdiction based where the "relationship or contact with the occurrence or the parties, has the greatest concern with the specific issue raised in the litigation." Babcock v. Jackson, 191 N.E.2d 279, 283 (N.Y. 1963).

(204.) Case C-341/04, Bondi v. Bank of Am., N.A., 2006 E.C.R. 1078, para. 33 (May 2, 2006) (emphasis added).

(205.) Id. para. 35.

(206.) Id. para. 36.

(207.) Id.

(208.) See id. para. 33. To avoid forum shopping in ordinary civil cases in the United States, many courts use choice of law rules. See, e.g., Mutrubuonco v. Shearson Lehman Huton, 514 U.S. 52 (1995).

(209.) RESTATEMENT (SECOND) OF CONFLICTS OF LAW [section] 6 (1971). The Restatement directs a state to follow its applicable statutory directives, but where a state has no such directives, a court may consider (i) the needs of the interstate and international systems; (ii) the relevant policies of the forum; (iii) the relevant laws and policies of other interest states, or countries; (iv) the protection of justified expectations; (v) certainty, predictability, and uniformity of results; and (vi) ease in determination and application of the law to be applied. Id.

(210.) In cases concerning contracts, the Restatement focuses on the following factors: (i) where the contract was executed; (ii) where negotiations occurred; "[iii] the place of performance; [iv] location of the subject matter of the contract; and [v] the domicile, residence, nationality, place of incorporation and place of business of the parties." Id. [section] 188.

(211.) See generally Rasmussen, supra note 183, at 56 (observing that "bankruptcy law is a term of the contract between the firm and those who extend credit to it").

(212.) See id. at 57-58.

(213.) See generally Convention on the Law Applicable to Contractual Obligations, June 19, 1980, 1980 O.J. (L 266) [hereinafter Rome Convention].

(214.) Id. art. 3(1).

(215.) Id. art. 4(2) (defining "central administration" as the corporation's principal place of business).

(216.) Id.

(217.) Id. art. l(2)(e) (noting that the Rome Convention shall not apply to "questions governed by the law of companies and other bodies corporate or unincorporate such as ... winding up of companies and other bodies corporate or unincorporate").

(218.) U.N. COMM'N ON INT'L TRADE LAW, LEGIS. GUIDE ON INSOLVENCY LAW, U.N. Sales No. E.05.V. 10 (2005) [hereinafter UNCITRAL DRAFT LEGIS.].

(219.) G.A. Res. 59/40, U.N. Doc. A/Res/59/40 (Dec. 16, 2004).

(220.) See UNCITRAL DRAFT LEGIS., supra note 218, at 1.

(221.) Id.

(222.) Id. at 67.

(223.) Id. at 68. The E.U. Insolvency Regulation also recommends that "lex concursus determine[] all the effects of the insolvency proceedings, both procedural and substantive, on the person and legal relations concerned." E.U. Insolvency Regulation, supra note 29, at L160/3.

(224.) See E.U. Insolvency Regulation, supra note 29, at L160/3; UNCITRAL DRAFT LEGIS., supra note 218, at 69.

(225.) Id. at 69-70.

(226.) Id. at 70 (stating the reason as the expectations of the employees and their relatively lesser bargaining power); see also E.U. Insolvency Regulation, supra note 29, at L160/4.

(227.) UNCITRAL DRAFT LEGIS., supra note 218, at 71 (noting that an exception to lex fori concursus should especially apply for interests in real property not located within the forum country). The risk of foreign law applying to local security interests may cause crippling instability to the secured lender, which may be further crippled if the debtor transfers its COMI. Id. Rather than applying the laws of another country, the E.U. Insolvency Regulation recommends opening a secondary proceeding in the jurisdiction where the rights in rem reside. E.U. Insolvency Regulation, supra note 29, at L160/3.

(228.) UNCITRAL DRAFT LEGIS., supra note 218, at 71 (discussing different approaches used to help the third party seeking to protect the transaction).

(229.) See supra Part IV.4 (discussing the implications that differing local insolvency policies may have on the outcome and treatment of the parties).

(230.) See Westbrook, Theory and Pragmatism, supra note 86, at 481 ("[T]he difficulty is that a single judge in the midst of litigation is all too likely to err about questions of foreign insolvency law, including reciprocity."). At least one legal scholar believes it to be naive to expect that courts will proceed in good faith to determine the best application of standards when a single large bankruptcy can bring more than a billion dollars in fees to local bankruptcy professionals. LoPucki, Global and Out of Control?, supra note 53, at 92.

(231.) See E.U. Insolvency Regulation, supra note 29, at L160/3; see, e.g., Case C-341/04, Bondi v. Bank of Am., N.A., 2006 E.C.R. 1-3813 (Sept. 27, 2005) (determining which court correctly determined that its home country was the center of Eurofood's main interests); Case C-341/04, Bondi v. Bank of Am., N.A., 2006 E.C.R. I-3813, paras. 10, 61 (May 2, 2006) (discussing how the priority rule requires mutual trust from all member states and noting that "a Member State may refuse to recognise insolvency proceedings opened in another Member State where the effects of such recognition would be manifestly contrary to that State's public policy") (emphasis added).

(232.) See Bufford, supra note 85, at 131-40 (arguing that parties deserve to have notice and an opportunity to be heard before a court can make its COMI determination).

(233.) See E.U. Insolvency Regulation, supra note 29, at L160/5.

(234.) See LoPucki, Global and Out of Control?, supra note 53, at 92-97; Bufford, supra note 85, at 135-38 (discussing the problem with, and possible solutions for, declaring the home country of a single corporate entity that is part of a larger corporate group). The panel's main duty would only be to determine the correct COMI of the single corporate entity, not the COMI of the corporate group as a whole. See id. However, as others have discussed, the corporate group should be considered when determining the proper adjudication of an entity within this group. See id.

(235.) The ECJ handed down its opinion in the Eurofood case long after the Irish and Italian courts began their battles. See Case C-341104, Bondi v. Bank of Am., N.A., 2006 E.C.R. I-3813 (Sept. 27, 2005). It would have been difficult to reverse anything that had been done, possible leading to the "first to file" rule. See LoPucki, Global and Out of Control?, supra note 53, at 95. For this reason, quicker action is necessary.

(236.) See Tabb, supra note 149, at 23 (noting that the passage of the 1898 Act marked the beginning of the era of permanent federal bankruptcy legislation).

(237.) See generally id. at 23-43 (discussing the history of bankruptcy laws through the Reform Act of 1994).

(238.) See supra Parts III-IV.

(239.) See, e.g., Martin, supra note 187, at 51-52 (noting the bias that still exists in countries where the law has changed but the policy lags behind); see also McAuley, supra note 105 (noting that insolvency laws in some European countries have changed, but the business culture is struggling to catch up).

(240.) See Case C-341104, Bondi v. Bank of Am., N.A., 2006 E.C.R. I-3813, para. 52 (Sept. 27, 2005) (relying on Recitals 16 and 22 of the E.U. Insolvency Regulation).

(241.) See LoPucki, Global and Out of Control?, supra note 53, at 87.

(242.) See supra Part III; see also Martin, supra note 187, at 52.

(243.) The Recitals of the E.U. Insolvency Regulation do little more than acknowledge that the laws of the initiating state may interfere with transactions in other member states. See E.U. Insolvency Regulation, supra note 29, at L160/3.

(244.) Case C-341/04, Bondi v. Bank of Am., N.A., 2006 E.C.R. I-3813, paras. 92-93 (Sept. 27, 2005) (noting that a proceeding is deemed opened according to national laws, and Irish company law, for example, calls for the opening of a proceeding on the date the petition is presented).

(245.) See Tabb, supra note 149, at 12-13 (noting that states regulated bankruptcy matters freely for most of the first 100 years of American history).

(246.) See generally id. at 23-36.