Ancillary and Other Cross-Border Cases (Page
Generally, a chapter 15 case is ancillary to
a primary proceeding brought in another country, typically the
debtor’s home country. As an alternative, the debtor or a
creditor may commence a full chapter 7 or chapter 11 case in the
United States if the assets in the United States are sufficiently
complex to merit a full-blown domestic bankruptcy case. 11 U.S.C.
§ 1520(c). In addition, under chapter 15 a U.S. court may
authorize a trustee or other entity (including an examiner) to act
in a foreign country on behalf of a U.S. bankruptcy estate. 11
U.S.C. § 1505.
An ancillary case is commenced under chapter
15 by a “foreign representative” filing a petition for
recognition of a “foreign proceeding.”1 11 U.S.C. § 1504.
Chapter 15 gives the foreign representative the right of direct
access to U.S. courts for this purpose. 11 U.S.C. § 1509. The
petition must be accompanied by documents showing the existence of
the foreign proceeding and the appointment and authority of the
foreign representative. 11 U.S.C. § 1515. After notice and a
hearing, the court is authorized to issue an order recognizing the
foreign proceeding as either a “foreign main proceeding” (a
proceeding pending in a country where the debtor’s center of
main interests are located) or a “foreign non-main proceeding”
(a proceeding pending in a country where the debtor has an
establishment,2 but not its center of main interests). 11 U.S.C.
§ 1517. Immediately upon the recognition of a foreign main
proceeding, the automatic stay and selected other provisions of
the Bankruptcy Code take effect within the United States. 11
U.S.C. § 1520. The foreign representative is also authorized to
operate the debtor’s business in the ordinary course. Id. The
U.S. court is authorized to issue preliminary relief as soon as
the petition for recognition is filed. 11 U.S.C. § 1519.