Malaysia Airlines might go bankrupt as a result of its missing flight

Upon reading this article on Malaysia Airlines, it sort of reminded me of the discussion we had in class regarding the bankruptcy of many companies in the U.S. due to asbestos law suits and the company's inability to pay. Similarly, Malaysia airlines, is facing potential law suits, because of the accident that happened early March, that could add up to $250 Million dollars. The company, which is already almost going under the water, with losses that add up to over $500 million in the last three years, might have no choice but to file for bankruptcy, most likely chapter 11 in the US (if it holds any sort of property here - according to the article).

However, this made me think of the Asbestos cases and made me consider the complexity of a bankruptcy filing of an international corporation. If as the article mentions, Malaysia airlines qualifies for bankruptcy in the US, which type of law would be applicable for the lawsuits of the family members of those who died in the flight that went missing. And how much would they recover, if at all? Most of those potential plaintiffs reside in the China, which makes the possibility of an appearance in court already an obstacle. Could they ever receive any sort of recovery. And even if they did, this is very similar to what happened to all those Asbestos plaintiffs. After finally winning their class suits, the plaintiffs won the case, but at the case only received very little money (in some cases $45 or so) as compared to what they were hoping. In this instance, bankruptcy only clearly helps the companies and not those who I think, should have ben helped.

The article also mentioned that the insurance company might be able to provide some sort of relief to those suing. If that's the case, I would think that the airlines might not have to end up filing to bankruptcy after all. However, since this is a governmentally owned and operated airlines, doesn't that mean that bankruptcy must be filed in Malaysia? And what if the company has assets in other countries, then what type of law would be applied? My question would be, when an international company (who hold assets in other nations) tries to file for bankruptcy, what type of law is applicable?

Hopefully, if the company does qualify under Title XI in the U.S., they are able to succesfully restructure and continue their services.


Source: http://www.insidecounsel.com/2014/04/09/malaysia-airlines-could-opt-for-bankruptcy-if-mult