Bankruptcy Group Pushes Axing Ch. 15's U.S. Property Rule (Law360)
A group of bankruptcy experts has proposed removing the US property requirement for foreign debtors seeking recognition of their foreign insolvency proceedings, a requirement the experts said was never intended for Chapter 15 cases. The technical changes would reverse a 2013 Second Circuit decision that required US property for Chapter 15 cases, which the experts from the National Bankruptcy Conference have criticized as a misreading of the law and which created an unnecessary hurdle for foreign debtors. While the subject matter of cases under other chapters are the debtors, Daniel Glosband, of counsel in Goodwin’s Financial Services and Financial Restructuring practices and a Conference member who helped draft Chapter 15, said that Chapter 15 cases are focused on the foreign proceedings themselves. Chapter 15’s eligibility requirements section “doesn’t say anything about the debtor,” he said. “The eligibility is based on the characteristics of the foreign proceeding,” Glosband said. “The nature of the debtor is beside the point.”
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