As restructurings become increasingly cross border, Chapter 15 recognitions of foreign proceedings have become increasingly common. Although not sought in most Chapter 15 cases (and successfully obtained in even fewer cases), recognition of a foreign plan of reorganization is an important tool available to a Chapter 15 debtor. Recognition of the foreign plan itself can be a critical step in foreign plan implementation with respect to assets located in the United States and in protecting the foreign debtor from collateral attacks in the United States, as recently demonstrated in the Chapter 15 case of Elpida Memory (Elpida).1

Background

Passed as part of the 2005 amendments to title 11 of the United States Code (the Bankruptcy Code), Chapter 15 implements the UNCITRAL Model Law on Cross-Border Insolvency. Its objectives include facilitating cooperation between U.S. and foreign courts, and promoting the “fair and efficient administration of cross-border insolvencies that protects the interests of all creditors, and other interested entities, including the debtor.” 11 U.S.C. §1501. After a foreign insolvency case is recognized in the United States as a foreign proceeding, and its trustees or representatives recognized as “foreign representatives,” Chapter 15 requires that the U.S. court grant comity to the foreign representative and cooperate with the foreign court or the foreign representative to the maximum extent possible. 11 U.S.C. §§1509(b)(3), 1525(a).