Second Circuit limits availability of Chapter 15
In a recent opinion on an issue of first impression, the US Court of Appeals for the Second Circuit held that foreign entities seeking recognition under Chapter 15 of the Bankruptcy Code must, in addition to satisfying the requirements for recognition set forth in that chapter, have a residence, domicile, place of business or assets in the US. The Second Circuit’s decision reversed an earlier Bankruptcy Court ruling that granted recognition under Chapter 15 to an Australian company that had not introduced evidence of any assets or operations in the US and conflicts with a recent ruling of the Bankruptcy Court for the District of Delaware holding that a Chapter 15 debtor is not required to have assets in the US. In so doing, the Second Circuit added an additional barrier to Chapter 15 recognition, which could be problematic for foreign companies looking to benefit from the advantages of the US legal system.
In connection with its ongoing liquidation proceedings in Australia, the foreign representatives of Octaviar Administration, an Australian company, petitioned the Bankruptcy Court for an order recognising the Australian liquidation as a ‘foreign main proceeding’ under Chapter 15. The Bankruptcy Court granted recognition and shortly thereafter Octaviar’s foreign representatives filed a motion seeking discovery from Drawbridge Special Opportunities Fund in connection with an ongoing lawsuit in Australia. Drawbridge appealed the recognition order and requested a stay of discovery pending appeal. The Bankruptcy Court granted the parties’ joint application for certification of the recognition order for direct appeal to the Second Circuit on the grounds that there was no controlling precedent governing whether or not a ‘debtor’ within the meaning of Chapter 15 is or is not required to comply with the domicile, residence, place of business or property requirement set out in section 109(a) of the Bankruptcy Code…
If you are registered and logged in to the site, click on the link below to read the rest of the Debevoise & Plimpton briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from The Lawyer
Briefings from Debevoise & Plimpton
This client update focuses on the examination priorities that are most relevant to investment advisers to private equity and hedge funds.
Debevoise & Plimption has published its FCPA Update for January 2013. The lead article concerns anti-corruption compliance in 2013.
Analysis from The Lawyer
Shell legal director Peter Rees is switching litigation control away from external counsel to a unified global team of in-housers