![]() courts interpreting chapter 15 to "consider its international origin, and the need to promote an application of this chapter that is consistent with the application of similar statutes adopted by foreign jurisdictions." and foreign courts, greater legal certainty for trade and investment, fair and efficient administration of cross-border cases to protect the interests of all stakeholders, protection and maximization of the value of a debtor's assets, and the rehabilitation of financially troubled businesses. Section 1501(a) of the Bankruptcy Code states that the purpose of chapter 15 is to "incorporate the so as to provide effective mechanisms for dealing with cases of cross-border insolvency with the objectives of," among other things, cooperation between U.S. It is patterned on the 1997 UNCITRAL Model Law on Cross-Border Insolvency ("Model Law"), which has been enacted in some form by more than 50 countries.īoth chapter 15 and the Model Law are premised upon the principle of international comity, or "the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws." Hilton v. ![]() Procedures, Recognition, and Relief Under Chapter 15Ĭhapter 15 was enacted in 2005 to govern cross-border bankruptcy and insolvency proceedings. After the Brazilian bankruptcy court entered an order stating that it should adjudicate the release issue, the Florida bankruptcy court determined as a matter of comity that the Brazilian bankruptcy court was the better forum for the litigation. The defendants sought to enjoin the foreign representative from prosecuting those claims, arguing that the debtor released them from liability. In Varig, the Brazilian debtor's foreign representative sued the debtor's former private-equity owners in the Brazilian bankruptcy court for, among other things, veil-piercing and breach of fiduciary duty. 29, 2021), the court dismissed an adversary proceeding commenced in the chapter 15 case of a bankrupt Brazilian air carrier due to the pendency of litigation in a Brazilian bankruptcy court. In In re Varig Logistica S.A., 2021 WL 5045684 (Bankr. ![]() ![]() Bankruptcy Court for the Southern District of Florida. The importance of these concepts was recently illustrated by a ruling handed down by the U.S. The foundation of chapter 15 of the Bankruptcy Code and similar legislation enacted by other countries to govern cross-border bankruptcy cases is "comity" and cooperation among U.S. ![]()
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