27 Pages Posted: 11 Oct 2010
Date Written: August 11, 2010
This article reports the findings of an empirical study of relief granted in all Chapter 15 cases filed since it was enacted in 2005. It argues that United States courts applying Chapter 15 have not unconditionally turned over debtor’s assets in the United States to foreign main proceedings. The results of the study show that while United States courts recognized foreign proceedings in almost every Chapter 15 case, courts entrusted United States assets to foreign proceedings for distribution in only 45.5% of cases where foreign proceedings were recognized. When such entrustment was granted, 31.8% of cases were accompanied by qualifying factors including, orders which protected United States creditors by allowing them to be paid according to the priority scheme under United States bankruptcy law; or assurances that certain United States creditors would be paid in full or in priority. In only 9.1% of cases, entrustment of assets for distribution was ordered without any qualifications; and where there were US creditors and assets at stake. From this data, this paper concludes that when deciding Chapter 15 cases, United States courts seldom grant Entrustment without Qualifications when United States creditors may be adversely affected. As a result, this article argues that Chapter 15 is not as universalist as its proponents claim it to be and exposes the inability of Chapter 15 to resolve conflicting priority rules between the United States and foreign proceedings.
Keywords: Bankruptcy, Insolvency, International Bankruptcy, International Insolvency, Chapter 15, Bankruptcy Code, Empirical, Territorialism, Universalism
Suggested Citation: Suggested Citation
Leong, Jeremy, Is Chapter 15 Universalist or Territorialist? Empirical Evidence from United States Bankruptcy Court Cases (August 11, 2010). Wisconsin International Law Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1690545