Page 27 - US Bankruptcy Code Overview

• A “foreign non-main proceeding” is a foreign proceeding that is pending in a country where the debtor has an “establishment.” 11 U.S.C. §§ 1502(5), 1517.
• An establishment is any place of operations where the debtor carries out a non-transitory economic activity. 11 U.S.C. § 1502(2).
• Upon recognition of a foreign proceeding, where necessary to effectuate the purpose of chapter 15 and to protect the assets of the debtor or the interests of the creditors, the Bankruptcy Court may, at the request of the foreign representative, grant any appropriate relief. 11 U.S.C. § 1521(a).
• Non-exclusive list of relief available:
• staying commencement or continuation of an individual action or proceeding concerning the debtor’s assets, rights, obligations or liabilities;
• staying execution against the debtor’s assets;
• suspending the right to transfer, encumber or otherwise dispose of any assets of the debtor;
• providing for discovery;
• entrusting the administration or realization of debtor’s assets within U.S.; and
• granting any additional relief that may be available to a trustee.
11 U.S.C. § 1521(a).
• The Bankruptcy Court may, at the request of the foreign representative, entrust the distribution of all or part of the debtor’s assets located in the U.S. to the foreign representative, provided that the Bankruptcy Court is satisfied that the interests of creditors in the U.S. are sufficiently protected. 11 U.S.C. § 1521(b).
• Relief under section 1521 may be granted “only if the interests of the creditors and other interested entities, including the debtor, are sufficiently protected,” and a court may impose appropriate conditions on relief. 11 U.S.C. § 1522(a)-(b).
• The Bankruptcy Court may provide “additional assistance” to a foreign representative if such assistance, consistent with the principles of comity, will reasonably assure—
1. just treatment of all holders of claims against or interests in the debtor’s property;
2. protection of claim holders in the United States against prejudice and inconvenience in the processing of claims in such foreign proceeding;
3. prevention of preferential or fraudulent dispositions of property of the debtor;
4. distribution of proceeds of the debtor’s property substantially in accordance with the order prescribed by this title; and
5. if appropriate, the provision of an opportunity for a fresh start for the individual that such foreign proceeding concerns.
11 U.S.C. § 1507.
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