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• The Court in which the Chapter 15 case is filed must be the proper Venue
• The Petitioner must be entitled to obtain the Relief sought
Not all foreign proceedings are eligible for recognition and relief under Chapter 15. Moreover, the relief the
U.S. bankruptcy court is empowered to grant in aid of a foreign proceeding depends ab initio on whether the
foreign proceeding is eligible for recognition and relief and where the proceeding is pending.
To be eligible for recognition under Chapter 15, the non‐U.S. proceeding must be a “foreign proceeding” as
redefined in the general definitions section of the U.S. Bankruptcy Code (section 101). A “Foreign Proceeding”
now means 9
“a collective judicial or administrative proceeding in a foreign country, including an interim
proceeding, under a law relating to insolvency or adjustment of debt in which proceeding the
assets and affairs of the debtor are subject to control or supervision by a foreign court, for the
purpose of reorganization or liquidation.”
11 U.S.C. §101(23). 10
Even if a proceeding pending outside of the United States meets the definition of “Foreign Proceeding,” it still
may not be eligible for recognition, and therefore relief, under Chapter 15.
Bankruptcy Code section 1502(7) expressly defines “recognition” for purposes of Chapter 15 to mean “the
entry of an order granting recognition of a foreign main proceeding or a foreign nonmain proceeding under this
chapter.” 11 U.S.C. §1502(7)(emphasis added). Thus, the Foreign Proceeding must be either a “foreign main
proceeding” or a “foreign nonmain proceeding” to be eligible for recognition.
A “Foreign Main Proceeding” is defined for purposes of Chapter 15 to mean “ a foreign proceeding pending in
the country where the debtor has the center of its main interests.” 11 U.S.C. §1502(4). While “center of main
interests” (popularly referred to as “COMI”) is not a defined term in Chapter 15 or elsewhere in the Bankruptcy
Code, section 1516 of the Bankruptcy Code ~ titled “Presumptions concerning recognition” ~ provides that “in
the absence of evidence to the contrary, the debtor’s registered office, or habitual residence in the case of an
individual, is presumed to be the center of the debtor’s main interests.” 11 U.S.C. §1516(c). 11
A “Foreign Nonmain Proceeding” is defined for purposes of Chapter 15 to mean “a foreign proceeding, other
than a foreign main proceeding, pending in a country where the debtor has an establishment.” 11 U.S.C. §1502(5).
The term “establishment” is defined in the Bankruptcy Code in the Chapter 15 definitions section. For
purposes of Chapter 15, “establishment” means “any place of operations where the debtor carries out a
nontransitory economic activity.” 11 U.S.C. §1502(2). However, neither “operations” nor “nontransitory
economic activity” are defined in the Bankruptcy Code.
In contrast, relief under former section 304 appears to have been available only in aid of what would be a
Foreign Main Proceeding under Chapter 15. The pre‐Chapter 15 definition of “foreign proceeding”, applicable
to old section 304, required the proceeding to be pending in a foreign country in which the debtor’s domicile,
residence, principal place of business or principal assets were located at the commencement of the
proceeding.
9 Prior to the BAPCPA amendments of 2005, which repealed old section 304 and added Chapter 15, “foreign
proceeding” was defined differently under the Bankruptcy Code. Former section 101(23) defined “foreign
proceeding” to mean “a judicial or administrative proceeding, whether or not under bankruptcy law, in a
foreign country in which the debtor’s domicile, residence, principal place of business, or principal assets were
located at the commencement of that proceeding, for the purpose of liquidating an estate, adjusting debts by
composition, extension or discharge, or effecting a reorganization.”
10 “Foreign Court” is a newly defined term in the Bankruptcy Code. Its definition is contained in Chapter 15
itself, rather than in the generic definition section 101 of the Bankruptcy Code. As such, the definition is
relevant solely for purposes of Chapter 15. “Foreign Court” means “a judicial or other authority competent to
control or supervise a foreign proceeding.” 11 U.S.C. §1502(3).
11 The major Chapter 15 disputes to date have been over the COMI of the foreign debtor. See, fn 3 supra.