Chapter Nine Conclusion

• Jurisdiction: United States

Chapter Nine Conclusion

Over the last decade, U.S. courts have wrestled with a number of issues under chapter 15. Several issues have been litigated, and court decisions have resolved many of them, establishing certain principles as discussed in the preceding chapters. For example, many of the issues related to recognition have been resolved, including what type of person or body qualifies as a foreign representative, what types of foreign proceedings are eligible for recognition, how to analyze a foreign debtor's COMI, and the relevant time for making that determination. However, in light of UNCITRAL's modification of the Guide to Enactment discussed in Chapter 2.V.D.1, it is possible that there could be renewed evaluation of the proper time for consideration of a foreign debtor's COMI. The principles surrounding recognition have largely been developed to a point in the case law where litigation over recognition, including the limited scope of the public policy exception to a recognition decision, will likely decrease and will most probably only be raised in connection with chapter 15 petitions that seek unique relief in connection with recognition or in unique or unusual situations requiring litigation at the margins of the already-established principles.

Where the bankruptcy courts will likely continue to see litigation in chapter 15 cases will be with respect to issues related to the additional assistance or appropriate relief available in chapter 15 cases under §§ 1521, 1522 and 1507. This litigation can be expected because each case is different, and foreign representatives seek different relief based on the specific facts and circumstances of the chapter 15 case and the needs of creditors in the related main or non-main proceeding. Additionally, foreign debtors are increasingly obtaining approval of restructuring plans or schemes of arrangement in foreign jurisdictions and bringing those approved restructurings to the U.S. for recognition and enforcement. Many of these restructurings will be easily approved, but some, especially those that contain provisions or relief that would not be possible under a chapter 11 plan of reorganization, will result in continued litigation.

Additionally, one can expect to see more decisions regarding litigation of avoidance actions, as foreign representatives can be expected to bring Condor actions, as discussed in Chapter 6 of this manual and elsewhere, and continue to press the boundaries of the litigation of...