European Implications of Bankruptcy Venue Shopping in the U.S.
For decades, the U.S . debate over states' efforts to attract corporations-and over Delaware's success in that endeavor-was mostly a sideshow for European companies and scholars. To be sure, there have long been worries that charter competition might emerge in the European Union and generate a regulatory "race to the bottom."l But the "real seat" doctrine, which assured that the country where a corporation's principal operations are located would supply its corporate law, was strongly entrenched. Whereas U.8. companies that would prefer a different regulatory framework need only reincorporate in the jurisdiction they wish to be governed by, European companies were stuck with the laws of the country where most of their operations were located . As a result , European companies did not have a dog in the U .S . skirmishes over charter competition in corporate law and venue shopping in corporate bankruptcy .2