Clifford Chance

Chapter 15 Update – Key Early 2024 Decisions (Al Zawawi, Sunac, & Wayne Burt)

May 2, 2024

In the almost 20 years since the enactment of Chapter 15 of the US Bankruptcy Code, the protections afforded by that Chapter to debtors in foreign proceedings have become much more commonplace. Nevertheless, the exact parameters of Chapter 15 continue to evolve through US court decisions. That evolution was particularly clear in the first four months of 2024, where three different courts weighed in on important Chapter 15 issues.

In this update, we first examine an Eleventh Circuit Court of Appeals decision on the often-debated issue of whether the Chapter 15 recognition of a foreign insolvency proceeding requires the foreign "debtor" to have property or other ties to the United States. We then review a New York bankruptcy court’s analysis of a foreign debtor’s "center of main interests" (or "COMI"), a necessary and basic determination in any Chapter 15 bankruptcy case that ultimately defines the rights and protections afforded to that debtor. And finally, we review a decision of the Third Circuit Court of Appeals involving a much-debated issue related to Chapter 15 cases: is Chapter 15 the exclusive means by which foreign debtors can obtain US court assistance in connection with foreign insolvency-related proceedings.

Download PDF