The Chapter 15 Two-Step: Shall We Dance?

Abstract

Chapter 15 provides for the recognition of foreign insolvency proceedings, allowing foreign representatives to gain assistance from U.S. bankruptcy courts to administer and protect a debtor's assets and business. Although a foreign representative commences a chapter 15 case by filing a “petition for recognition of a foreign proceeding under section 1515,” the foreign representative cannot take advantage of the vast majority of rights, benefits and protections provided by chapter 15 until the bankruptcy court enters an order granting recognition of the foreign insolvency proceeding. Chapter 15, however, includes a provision that allows a bankruptcy court to grant provisional relief if the requested relief “is urgently needed to protect the assets of the debtor or the interests of the creditors.” This article discusses the most expedient method to secure provisional relief and recognition.