International Bankruptcy
Chapter 15 of the Bankruptcy Code provides various mechanisms to deal with cross-border insolvency cases. Chapter 15 was added to the Bankruptcy Code in 2005 and is based on a United Nations model law.
The purpose of chapter 15 is to provide mechanisms for dealing with cases of cross-border insolvency with the objectives of cooperation between courts and authorities of the United States and those of foreign countries as to cross-border insolvency cases. Chapter 15 seeks to provide "greater legal certainty for trade and investment", the fair and efficient administration of cross-border insolvency case to protect the interests of the creditors, the debtor and other interested parties, to protect and maximize the value of the debtor's assets, and to facilitate the rescue of financially troubled businesses to protect investment and employment.
Chapter 15 applies where assistance is sought in the United States in connection with a foreign proceeding, where assistance is sought in a foreign country in connection with a U.S. bankruptcy case, where a foreign insolvency case and U.S. bankruptcy case are pending concurrently with respect to the same debtor, or where foreign creditors or other interested foreign persons seek to commence or participate in a U.S. bankruptcy case.
Chapter 15 does not apply to foreign insurance companies, individuals who are U.S. citizens or permanent residents who are eligible for chapter 13, entities subject to SIPA, certain stockbrokers, and certain commodity brokers.
Cases brought under chapter 15 will be ancillary to insolvency cases brought in a foreign country unless a bankruptcy case is commenced under another chapter of the Bankruptcy Code. Chapter 15 contains provisions regarding "recognition", available relief, and the specific means by which the parties should engage in communication and cooperation.
Chapter 15 permits the recognition in the U.S. of foreign main and foreign nonmain proceedings. A foreign main proceeding is a foreign proceeding pending in a country where the debtor has its "center of main interests". A foreign nonmain proceeding is a foreign proceeding other than a a foreign main proceeding in a country where the debtor has any place of operations where it carries out nontransitory economic activity.
Upon recognition, a foreign main proceeding is entitled to certain nondiscretionary relief, such as the benefits of the automatic stay and the ability to operate the debtor's business in accordance with the Bankruptcy Code.
The purpose of chapter 15 is to provide mechanisms for dealing with cases of cross-border insolvency with the objectives of cooperation between courts and authorities of the United States and those of foreign countries as to cross-border insolvency cases. Chapter 15 seeks to provide "greater legal certainty for trade and investment", the fair and efficient administration of cross-border insolvency case to protect the interests of the creditors, the debtor and other interested parties, to protect and maximize the value of the debtor's assets, and to facilitate the rescue of financially troubled businesses to protect investment and employment.
Chapter 15 does not apply to foreign insurance companies, individuals who are U.S. citizens or permanent residents who are eligible for chapter 13, entities subject to SIPA, certain stockbrokers, and certain commodity brokers.
Cases brought under chapter 15 will be ancillary to insolvency cases brought in a foreign country unless a bankruptcy case is commenced under another chapter of the Bankruptcy Code. Chapter 15 contains provisions regarding "recognition", available relief, and the specific means by which the parties should engage in communication and cooperation.
Chapter 15 permits the recognition in the U.S. of foreign main and foreign nonmain proceedings. A foreign main proceeding is a foreign proceeding pending in a country where the debtor has its "center of main interests". A foreign nonmain proceeding is a foreign proceeding other than a a foreign main proceeding in a country where the debtor has any place of operations where it carries out nontransitory economic activity.
Upon recognition, a foreign main proceeding is entitled to certain nondiscretionary relief, such as the benefits of the automatic stay and the ability to operate the debtor's business in accordance with the Bankruptcy Code.