Editors’ Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to firstname.lastname@example.org and we will try to answer it.
Harry A asks, what is a Chapter 15 Proceeding?
Chapter 15 of the Bankruptcy Code was enacted as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). It replaced existing section 304 of the Bankruptcy Code. Section 304 empowered U.S. courts to open an “ancillary” proceeding to representatives of foreign debtors and grant various broad forms of relief over U.S. operations and assets. Section 304 ancillary proceedings, however, did not expressly authorize foreign representatives to operate the debtor’s business or sell its assets. Chapter 15 was designed to improve upon section 304 by providing a framework to coordinate the administration of cross-border insolvencies across multiple jurisdictions in a more flexible and efficient manner.
Note: This 90 Second Lesson is based, in substantial part, in material reprinted from Commercial Bankruptcy Litigation 2d and Strategic Alternatives for and Against Distressed Businesses, with permission of Thomson Reuters. For more information about these publications, please visit www.legalsolutions.com.
The editors and editorial board of DailyDAC include preeminent restructuring and insolvency professionals, journalists, and editors. They are devoted to providing reliable and plain English education and deal intelligence about assignments, corporate bankruptcy, receiverships, out-of-court workouts an similar topics.
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