Many of us have a basic understanding of U.S. bankruptcy filings under chapters 7, 11, and 13, but we may not know very much about chapter 15. Jackson Walker Bankruptcy, Restructuring, & Recovery attorneys Kristhy Peguero and Jennifer Wertz discuss chapter 15’s cross-border insolvency and its invocation of the jurisdiction of the U.S. bankruptcy court to assist in the administration of foreign insolvency and restructuring proceedings. With chapter 15 filings, you’ll see novel orders between domestic and foreign courts in an attempt to create harmony for international debtors. Typically, this is to address issues related to property located inside the United States.
The issues of jurisdiction and venue are important within the context of chapter 15 filings. Where the debtor has a main interest, or comity, this is traditionally where the proceedings are held. However, it could also be where the debtor’s headquarters is located. There are some interesting twists with how the debtor may be able to shift the comity in anticipation of a filing. Separate from jurisdiction, the debtor may also seek a venue recognition within the United States, depending upon their operations here. To make it even more interesting, the debtor may have their choice between several different venues within the United States. Texas bankruptcy courts, especially the Southern District of Texas, have become more popular recently with its connection to international commerce, technology advancements, sophistication, and consistency of judges.
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