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

However, as this Comment has discussed, most countries have developed their insolvency laws for different reasons and based on different policies. (242) These differing policies cause countries to have different motivations in hosting a debtor's insolvency proceedings. Rather than abstaining or deferring to another country, a battle over jurisdiction will ensue. Because the E.U. Insolvency Regulation only vaguely defines the COMI and does not provide guidelines by which to determine the true COMI, (243) the ECJ will follow the "first to file" rule and side with the first country to open a valid insolvency proceeding under the E.U. Insolvency Regulation. (244) Therefore, one solution is to remove the ambiguity and vagueness from the COMI determination by defining or enumerating what the ECJ meant by "objective and ascertainable" factors. A uniform set of Restatement-like guidelines will give courts some guidance and justification for making COMI determinations. As more opinions and case law discuss sufficiently "objective and ascertainable" criteria, the COMI may become better defined. Appointing an arbitrary panel to make such a determination will remove the influence of differing local policies from the equation.

Just over a hundred years ago, insolvency laws and policies in the United States were arguably in a similar position as the insolvency laws and policies throughout the E.U. member states are now. (245) Even after passing the first permanent federal bankruptcy laws in 1898, American bankruptcy jurisprudence continued to see a great deal of fluctuation and instability. (246) Perhaps insolvency laws in E.U. member states are destined to see similar fluctuations and instability. However, as more courts such as the ECJ continue to decide on "objective and ascertainable" factors for determining a debtor's COMI, such a determination will become more predictable, at which point a harmonious set of laws and policies may develop among member states like Ireland and Italy, and perhaps even the United States.

*** (1.) See Claudio Celani, The Story Behind Parmalat's Bankruptcy, 31 EXECUTIVE INTELLIGENCE REV., Jan. 16, 2004, available at http://207.234.232.77/other/2004/3102parmalat_invest.html (noting the Parmalat was the largest Italian food company and fourth largest food company in Europe).

(2.) Id. ("Parmalat is the largest bankruptcy in European history, representing 1.5% of Italian GNP--proportionally larger than the combined ratio of the Enron and WorldCom bankruptcies to the U.S. GNP."); see also Gall Edmonson & Laura Cohn, How Parmalat Went Sour, BUSINESS WEEK, Jan. 12, 2004, http://www.businessweek.com/magazine/content/04_02/b3865053_mz054.htm.

(3.) See Group Structure Parmalat Finanziaria S.P.A., Dec. 31, 2003, http://www.parmalat.com/en/doc/Group%20structure%2031dic03.pdf [hereinafter Parmalat Group Structure] (listing other subsidiaries in Italy, as well as in Austria, Belgium, France, Germany, Ireland, Luxembourg; in North America--United States and Canada--as well as Central and South America).

(4.) See, e.g., Case C-341/04, Bondi v. Bank of Am., N.A., CELEX No. 604O0341, 2004 WL 3168085 (Sept. 15, 2004); Case C-341/04, Bondi v. Bank of Am., N.A., 2006 E.C.R. 1-3813 (Sept. 27, 2005) (discussing the dispute between Irish and Italian courts over the jurisdiction of insolvency proceedings); Case C-341/04, Bondi v. Bank of Am., N.A., 2006 E.C.R. 1078 (May 2, 2006) (handing down the final judgment).

(5.) See supra note 4 and accompanying text.

(6.) See E. Bruce Leonard, The International Scene: The International Year in Review, 22-10 AM. BANKR. INST. J. 22 (2003) (discussing conflicts that could arise under the E.U.'s new regulations).

(7.) See Jeff Carruth, Insolvencies in the Global Context, 38 INT'L LAW. 353, 360-61 (2004).

(8.) Of key importance to this discussion is the European Union's Insolvency Regulation (E.U. Insolvency Regulation), United Nations Commission on International Trade Law's (UNCITRAL) Model Insolvency Act (the Model Act), and Chapter 15 of the United States' Bankruptcy Code (Chapter 15).

(9.) Craig Martin, Eurofood Fight: Forum Shopping Under the E.U. Regs, AM. BANKR. INST. J., Mar. 2005, at 36.

(10.) Daniel J. Wakin, There Were Earlier Signs of Trouble at Parmalat, N.Y. TIMES, Jan. 15, 2005, at C1; John Paul Lucci, The Bankruptcy Heard Around the World and the International Ricochet of Sarbanes-Oxley, 67 ALB. L. R. 211 n.3 (noting Enron's petition for bankruptcy protection was filed on Dec. 2, 2001); Marvin E. Sprouse III, Affairs of State: A Collision of Fairness: Sarbanes-Oxley and Section 510(b) of the Bankruptcy Code, 24-8 AM. BANKR. INST. J. 8, 50 n.24 (2005) (noting WorldCom filed for protection on July 21, 2002).

(11.) Wakin, supra note 10.

(12.) Id.

(13.) Alessandra Galloni, Founder, 15 Others to Stand Trial for Parmalat Scandal, GLOBE & MAIL, June 27, 2005, at B11.

(14) See Wakin, supra note 10. Among those under suspicion was the Bank of Italy for "not being attentive enough to the fact that some banks had built up vast exposure to the company." Id. An Italian agency responsible for overseeing financial markets was also blamed. Id. Even the small community of Parma was implicated in the scandal or was thought to have protected Parmalat from exposure. Id. In addition, Merrill Lynch, which took part in many of Parmalat's complex financial dealings, noted that Parmalat inefficiently managed its balance sheet by regularly reporting high cash balances while taking regular recourse to the bond market. Id.

(15.) Id.

(16.) Martin, C., supra note 9, at 36 (quotations in the original).

(17.) See Wakin, supra note 10, at C1.

(18.) See Parmalat Group Structure, supra note 3.

(19.) See Martin, C., supra note 9, at 36.

(20.) See id.

(21.) Id. (noting that Eurofood was wholly owned by Parmalat and has four directors--two Italian and two Irish).

(22.) A winding up petition requests that a court open a liquidation insolvency proceeding resulting in the realization of the debtor's assets. PAUL OMAR, EUROPEAN INSOLVENCY LAW 75 (2004) (citing European Insolvency Convention art. 2(c) (1995)). In other words, the creditors are able to sell the debtor's assets to satisfy the debts owed to them. See id.

(23.) See Martin, C., supra note 9, at 36.

(24.) See id. Extraordinary administration of large insolvent enterprises, or ammistrazione straordinaria delle grandi imprese in stato di insolvelvenza, is an Italian type of reorganization where a special administrator is appointed to handle the reorganization. 3 COLLIER INT'L BUS. INSOLVENCY GUIDE [paragraph] 28A.04[3] (Richard F. Broude et al. eds., 2006); see also Nikki Tait, Parmalat's Border Dispute, FIN. TIMES, Mar. 29, 2004 (noting that the Italian government appointed Enrico Bondi to administer Parmalat's affairs).

(25.) See Martin, C., supra note 9, at 37 (noting the Italian court's grounds for deeming Italy to be Eurofood's center of main interests (COMI) was that directors of Eurofood operated out of Parmalat's Italian office) (citation omitted).

(26.) See id.

(27.) See In re Eurofoods IFSC Ltd., [2005] I.L.Pr. 2, 2004 WL 3222613 at * 30 (July 27, 2004) (Ir.) (noting that the Court will determine the consequences of the "appointment of a Provisional Liquidator" and the "function of the Central Office of the High Court").

(28.) Id. ("For the purposes of conducting the proceedings in winding up a company and performing such duties in reference thereto as the court may impose, the court may appoint a liquidator or liquidators." (quoting Section 225 of the Companies Act)). The Court further noted that courts may appoint Provisional Liquidators before or at any time after the filing of a winding up petition, and that, if a court so chooses, it may restrict the Provisional Liquidator's powers by such an order. Id. (quoting Section 226 of the Companies Act).

(29.) The Irish Supreme Court looked to the E.U. Insolvency Regulation that defines the "centre of main interests" as "the place where the debtor conducts the administration of his interests on a regular basis and is therefore ascertainable by third parties." Council Regulation (EC) No. 1346/2000 of 29 May 2000 (OJ 2000 L160/2) [hereinafter E.U. Insolvency Regulation]. As the need to unify insolvency proceedings within the European community grows, the European Council adopted the E.U. Insolvency Regulation. MIGUEL VIRGOS & FRANCISCO GARCIMARTIN, EUROPEAN INSOLVENCY REGULATION: LAW AND PRACTICE 3 (2004) (citing E.U. Insolvency Regulation at L160/1).

(30.) In re Eurofoods, [2005] I.L.Pr. 2, 2004 WL 3222613 at * 26-27 (discussing the Italian court's decision that Italy was the COMI).

(31.) Id. at * 33-34.

(32.) Id. at * 34. In considering third parties' perception of Eurofood's COMI, the Irish Supreme Court took a literal reading of the E.U. Insolvency Regulation's definition of COMI. See E.U. Insolvency Regulation, supra note 29, at L160/2.

(33.) Martin, C., supra note 9, at 36. On February 20, 2004, the Italian Court held that Eurofood's COMI was Italy. Id.

(34.) In re Eurofoods, [2005] I.L.Pr. 2, 2004 WL 3222613 at * 34-35.

(35.) Id. at * 35-36. Among the five questions posed were (1) whether the Irish court's appointment of a liquidator along with the liquidator's actions in the winding up of Eurofood in Ireland constituted the opening of an insolvency proceeding under the E.U. Insolvency Regulation; and (2) whether the governing factor for the COMI test favors where the administration occurs or where the power to appoint the administrators lies. Id.