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Vol 13, Num 1 l August 2016


► In This Issue:

Recognition Denied: COMI Manipulation in Chapter 15


Charlie Liu
U.S. Bankruptcy Court
Eastern District of New York
Central Islip, NY

In what is often viewed a rudimentary inquiry, recognition of foreign insolvency proceedings under chapter 15 can be a closely scrutinized affair. In In re Creative Finance Ltd. (In Liquidation), 543 B.R. 498 (Bankr. S.D.N.Y. 2016), Judge Robert E. Gerber of the United States Bankruptcy Court for the Southern District of New York (before his retirement in early 2016) dismissed a chapter 15 case after concluding that the debtors’ “Center of Main Interests” (“COMI”) did not change to the British Virgin Islands (“BVI”) — the debtors’ letterbox jurisdiction and where the initial liquidation was filed. The bankruptcy court found that both the debtors’ and the liquidator’s activities in the BVI were insufficient to warrant recognition under the Bankruptcy Code, either as a main or non-main proceeding. Notably, even though the case was not dismissed on the basis of bad faith, the court nonetheless made specific findings of the debtors’ numerous misconducts that other courts may consider. » Read More

Abengoa Sets the Stage for Future Disputes Concerning Recognition of Pre-Insolvency Proceedings Under Chapter 15


Robert Miller
Manier & Herod, P.C.
Nashville, Tenn.


Under chapter 15 of the Bankruptcy Code, recognition of a foreign proceeding is required to obtain a stay of proceeding against the property of the foreign debtor located in the United States, to entrust such property to the representative of the foreign debtor, and to receive other important protections and rights. Recognition is often the most important relief obtained in a chapter 15 case, but when does a foreign insolvency action constitute a foreign proceeding under chapter 15 of the Bankruptcy Code? Some foreign countries have enacted pre-insolvency regimes more closely resembling out-of-court agreements. The recent recognition of a standstill agreement under section 5bis of the Spanish Insolvency Act as a foreign proceeding in the Abengoa S.A. chapter 15 case by the United States Bankruptcy Court for the District of Delaware illustrates the uncertainty underpinning this inquiry and highlights potential future issues. » Read More

International Committee to Host Annual Cross-Border Insolvency Program

On November 14th, 2016, the International Committee will host the Cross-Border Insolvency Program. This one-day seminar will be held at Davis Polk & Wardwell’s conference center in midtown Manhattan, New York. The program features a unique gathering of speakers from several nations,  discussing some of today’s most relevant cross-border cases and topics. Speakers will explore the issues involved in developing a plan to address mass tort claims in the US and Canada; resort insolvencies in the Caribbean; key issues on big multi-jurisdictional restructuring cases in Latin America; practical and legal issues encountered in cross-border fraud involving assets and creditors in multiple jurisdictions; and the comprehensive reforms undertaken by Jamaica to strengthen its economy.

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International Aspects of U.S. Bankruptcy Cases: Is a U.S. Bankruptcy Court the Proverbial Roaring Deaf Lion in the International Forest?

From the Northeast Bankruptcy Workshop - This discussion explores the breadth and limitations of U.S. Bankruptcy Code and U.S. bankruptcy court reach in the international community. There is no discussion of chapter 15; rather, the panel covers such issues as whether it is possible for a debtor to create jurisdiction in the U.S., and if so, whether it can and should maintain that jurisdiction.

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