Second Circuit and Delaware Bankruptcy Court Take Different Views of Whether a Foreign Debtor Must Have Assets in the United States to Be Eligible for Recognition under Chapter 15
Publication| Bankruptcy & Corporate Restructuring
Courts in the two circuits, which saw the majorityof 2013’s Chapter 15 recognition proceedings,recently addressed—and came to oppositeconclusions about—a novel issue: whether anentity is required to have property in the UnitedStates to qualify for relief as a debtor underChapter 15 of the United States BankruptcyCode. Chapter 15 is the equivalent of a proceedingunder Part IV of Canada’s Companies’Creditors Arrangement Act [CCAA]1 (i.e.,the U.S.’s enactment of the UNCITRAL ModelLaw on Cross Border Insolvencies). Chapter 15was adopted in 2005; thus, case law is continuingto develop. It is noteworthy that two courtswith significant dockets disagreed with one anotherin rulings issues less than a week apart inDecember 2013.
Reproduced with permission of the publisher LexisNexis Canada Inc. from Commercial Insolvency Reporter, Vol. 26, Nos. 3 & 4, April 2014.