Bondholders hit out at 'forum shopping' by borrowers
An increasing number of European companies are moving their operations to different jurisdictions to avoid punitive bankruptcy regimes, leaving bondholders at a disadvantage. Is a harmonised EU restructuring regime the answer?
European corporate bond investors have expressed concern that struggling companies are increasingly moving abroad to avoid paying back creditors.
Over the past year, a number of issuers have moved their operations to different jurisdictions in order to take advantage of more flexible bankruptcy laws – a process known as “bankruptcy tourism” or “forum shopping”. Market participants have called for stronger EU regulation to tackle the issue.
Europe already has cross-border regulation governing
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