Details

Autor(en) / Beteiligte

• Shuster, George W
• Loveland, Benjamin W

Titel

Upside Down in Chapter 15: Can U.S. Entities Qualify as "Foreign" Debtors in the U.S.?

Ist Teil von

• American Bankruptcy Institute journal, 2017-05, Vol.36 (5), p.22

Ort / Verlag

Alexandria: American Bankruptcy Institute

Erscheinungsjahr

2017

Quelle

Nexis Uni (LexisNexis)

Beschreibungen/Notizen

• [...]what if that U.S. entity is part of a larger corporate family that conducts the bulk of its business in another country and commences insolvency proceedings for that business outside the U.S.? This is precisely the scenario presented by the chapter 15 case of Karhoo Inc, filed in late 2016 in the U.S. Bankruptcy Court for the Southern District of New York.1 Karhoo, a Delaware corporation, was the parent to several U.K. subsidiaries. Relevant Provisions and Background One of chapter 15's principal objectives is to foster cooperation among the U.S. and foreign courts as they address the insolvency of multinational companies and corporate groups.2 Chapter 15 generally embraces the "universalist" theory of international insolvency, which posits that a single court - in the jurisdiction where the debtor has its principal place of business - should have primary adjudicatory responsibility for the insolvency proceedings of a multinational companies and corporate groups.3 While the representatives of the foreign entity can seek assistance from "auxiliary" courts in other jurisdictions as needed, the intention is that those courts will, for the most part, defer to the law of the debtor's primary or "main" jurisdiction.4 Consistent with this view, chapter 15 allows for the recognition of a foreign insolvency proceeding in the U.S. and, in many respects, defers to the primary authority of those proceedings.5 Chapter 15 affords considerable flexibility in effectuating these goals.6 Notwithstanding its generally flexible and universalist approach, chapter 15 poses its own barriers to entry. Courts, including the Second Circuit Court...