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The Bankruptcy StrategistFeaturesBankruptcyInternational Law

Challenges Faced By U.S. Debtors Aiming to Qualify for Chapter 15 Recognition

By Richard J. Bernard and Roya Imani
October 01, 2023

Although Chapter 11 under the Bankruptcy Code represents a powerful corporate restructuring tool, many complain about the cost of Chapter 11. Other countries have restructuring and liquidation regimes that may represent more efficient tools to restructure or liquidate non-U.S.-based companies with U.S. subsidiaries and operations. Joint non-U.S. and U.S. proceedings may be the only realistic solution for mega cases like Nortel (Canada, United States and United Kingdom), Lehman Brothers (United States and United Kingdom) and Enron (United States and Canada).

There are, however, significant costs and complexities of running parallel proceedings with multiple courts around the world applying different laws and reaching conflicting rulings. When restructuring or liquidating a non-U.S.-based company with U.S. operations, practitioners should consider the benefit and efficiency of utilizing the company's home country laws under a foreign proceeding and a Chapter 15 in the United States.

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