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CHAPTER 15--ANCILLARY AND OTHER CROSS-BORDER CASES
Sec.
1501. Purpose and scope of application.
SUBCHAPTER I--GENERAL PROVISIONS
1502. Definitions.
1503. International obligations of the United States.
1504. Commencement of ancillary case.
1505. Authorization to act in a foreign country.
1506. Public policy exception.
1507. Additional assistance.
1508. Interpretation.
SUBCHAPTER II--ACCESS OF FOREIGN REPRESENTATIVES AND
CREDITORS TO THE COURT
1509. Right of direct access.
1510. Limited jurisdiction.
1511. Commencement of case under section 301 or 303.
1512. Participation of a foreign representative in a case under this title.
1513. Access of foreign creditors to a case under this title.
1514. Notification to foreign creditors concerning a case under this title.
SUBCHAPTER III--RECOGNITION OF A FOREIGN
PROCEEDING AND RELIEF
1515. Application for recognition.
1516. Presumptions concerning recognition.
1517. Order granting recognition.
1518. Subsequent information.
1519. Relief that may be granted upon filing petition for recognition.
1520. Effects of recognition of a foreign main proceeding.
1521. Relief that may be granted upon recognition.
1522. Protection of creditors and other interested persons.
1523. Actions to avoid acts detrimental to creditors.
1524. Intervention by a foreign representative.
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SUBCHAPTER IV--COOPERATION WITH FOREIGN COURTS AND
FOREIGN REPRESENTATIVES
1525. Cooperation and direct communication between the court and foreign
courts or foreign representatives.
1526. Cooperation and direct communication between the trustee and
foreign courts or foreign representatives.
1527. Forms of cooperation.
SUBCHAPTER V--CONCURRENT PROCEEDINGS
1528. Commencement of a case under this title after recognition of a foreign
main proceeding.
1529. Coordination of a case under this title and a foreign proceeding.
1530. Coordination of more than 1 foreign proceeding.
1531. Presumption of insolvency based on recognition of a foreign main
proceeding.
1532. Rule of payment in concurrent proceedings.
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Sec. 1501. Purpose and scope of application
(a) The purpose of this chapter is to incorporate the Model Law on CrossBorder
Insolvency so as to provide effective mechanisms for dealing with
cases of cross-border insolvency with the objectives of--
(1) cooperation between--
(A) courts of the United States, United States
trustees, trustees, examiners, debtors, and debtors in
possession; and
(B) the courts and other competent authorities of
foreign countries involved in cross-border insolvency
cases;
(2) greater legal certainty for trade and investment;
(3) fair and efficient administration of cross-border
insolvencies that protects the interests of all creditors, and
other interested entities, including the debtor;
(4) protection and maximization of the value of the
debtor's assets; and
(5) facilitation of the rescue of financially troubled
businesses, thereby protecting investment and preserving
employment.
(b) This chapter applies where--
(1) assistance is sought in the United States by a foreign
court or a foreign representative in connection with a foreign
proceeding;
(2) assistance is sought in a foreign country in
connection with a case under this title;
(3) a foreign proceeding and a case under this title with
respect to the same debtor are pending concurrently; or
(4) creditors or other interested persons in a foreign
country have an interest in requesting the commencement of, or
participating in, a case or proceeding under this title.
(c) This chapter does not apply to--
(1) a proceeding concerning an entity, other than a
foreign insurance company, identified by exclusion in section
109(b);
(2) an individual, or to an individual and such
individuaľs spouse, who have debts within the limits specified
in section 109(e) and who are citizens of the United States or
aliens lawfully admitted for permanent residence in the United
States; or
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(3) an entity subject to a proceeding under the Securities
Investor Protection Act of 1970, a stockbroker subject to
subchapter III of chapter 7 of this title, or a commodity broker
subject to subchapter IV of chapter 7 of this title.
(d) The court may not grant relief under this chapter with respect to any
deposit, escrow, trust fund, or other security required or permitted under
any applicable State insurance law or regulation for the benefit of claim
holders in the United States.
SUBCHAPTER I--GENERAL PROVISIONS
Sec. 1502. Definitions
For the purposes of this chapter, the term--
(1) `debtor' means an entity that is the subject of a
foreign proceeding;
(2) `establishmenť means any place of operations where
the debtor carries out a nontransitory economic activity;
(3) `foreign courť means a judicial or other authority
competent to control or supervise a foreign proceeding;
(4) `foreign main proceeding' means a foreign proceeding
pending in the country where the debtor has the center of its
main interests;
(5) `foreign nonmain proceeding' means a foreign
proceeding, other than a foreign main proceeding, pending in a
country where the debtor has an establishment;
(6) `trustee' includes a trustee, a debtor in possession
in a case under any chapter of this title, or a debtor under
chapter 9 of this title;
(7) `recognition' means the entry of an order granting
recognition of a foreign main proceeding or foreign nonmain
proceeding under this chapter; and
(8) `within the territorial jurisdiction of the United
States', when used with reference to property of a debtor,
refers to tangible property located within the territory of the
United States and intangible property deemed under applicable
nonbankruptcy law to be located within that territory, including
any property subject to attachment or garnishment that may
properly be seized or garnished by an action in a Federal or
State court in the United States.
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Sec. 1503. International obligations of the United States
To the extent that this chapter conflicts with an obligation of the United
States arising out of any treaty or other form of agreement to which it is a
party with one or more other countries, the requirements of the treaty or
agreement prevail.
Sec. 1504. Commencement of ancillary case
A case under this chapter is commenced by the filing of a petition for
recognition of a foreign proceeding under section 1515.
Sec. 1505. Authorization to act in a foreign country
A trustee or another entity (including an examiner) may be authorized by
the court to act in a foreign country on behalf of an estate created under
section 541. An entity authorized to act under this section may act in any
way permitted by the applicable foreign law.
Sec. 1506. Public policy exception
Nothing in this chapter prevents the court from refusing to take an action
governed by this chapter if the action would be manifestly contrary to the
public policy of the United States.
Sec. 1507. Additional assistance
(a) Subject to the specific limitations stated elsewhere in this chapter the
court, if recognition is granted, may provide additional assistance to a
foreign representative under this title or under other laws of the United
States.
(b) In determining whether to provide additional assistance under this
title or under other laws of the United States, the court shall consider
whether such additional assistance, consistent with the principles of comity,
will reasonably assure--
(1) just treatment of all holders of claims against or
interests in the debtor's property;
(2) protection of claim holders in the United States
against prejudice and inconvenience in the processing of claims
in such foreign proceeding;
(3) prevention of preferential or fraudulent dispositions
of property of the debtor;
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(4) distribution of proceeds of the debtor's property
substantially in accordance with the order prescribed by this
title; and
(5) if appropriate, the provision of an opportunity for a
fresh start for the individual that such foreign proceeding
concerns.
Sec. 1508. Interpretation
In interpreting this chapter, the court shall 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.
SUBCHAPTER II--ACCESS OF FOREIGN REPRESENTATIVES AND
CREDITORS TO THE COURT
Sec. 1509. Right of direct access
(a) A foreign representative may commence a case under section 1504 by
filing directly with the court a petition for recognition of a foreign proceeding
under section 1515.
(b) If the court grants recognition under section 1517, and subject to any
limitations that the court may impose consistent with the policy of this
chapter--
(1) the foreign representative has the capacity to sue and
be sued in a court in the United States;
(2) the foreign representative may apply directly to a
court in the United States for appropriate relief in that court;
and
(3) a court in the United States shall grant comity or
cooperation to the foreign representative.
(c) A request for comity or cooperation by a foreign representative in a
court in the United States other than the court which granted recognition
shall be accompanied by a certified copy of an order granting recognition
under section 1517.
(d) If the court denies recognition under this chapter, the court may issue
any appropriate order necessary to prevent the foreign representative from
obtaining comity or cooperation from courts in the United States.
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(e) Whether or not the court grants recognition, and subject to sections
306 and 1510, a foreign representative is subject to applicable
nonbankruptcy law.
(f) Notwithstanding any other provision of this section, the failure of a
foreign representative to commence a case or to obtain recognition under
this chapter does not affect any right the foreign representative may have to
sue in a court in the United States to collect or recover a claim which is the
property of the debtor.
Sec. 1510. Limited jurisdiction
The sole fact that a foreign representative files a petition under section
1515 does not subject the foreign representative to the jurisdiction of any
court in the United States for any other purpose.
Sec. 1511. Commencement of case under section 301 or 303
(a) Upon recognition, a foreign representative may commence--
(1) an involuntary case under section 303; or
(2) a voluntary case under section 301 or 302, if the
foreign proceeding is a foreign main proceeding.
(b) The petition commencing a case under subsection (a) must be
accompanied by a certified copy of an order granting recognition. The court
where the petition for recognition has been filed must be advised of the
foreign representative's intent to commence a case under subsection (a)
prior to such commencement.
Sec. 1512. Participation of a foreign representative in a case under
this title
Upon recognition of a foreign proceeding, the foreign representative in the
recognized proceeding is entitled to participate as a party in interest in a
case regarding the debtor under this title.
Sec. 1513. Access of foreign creditors to a case under this title
(a) Foreign creditors have the same rights regarding the commencement
of, and participation in, a case under this title as domestic creditors.
(b)(1) Subsection (a) does not change or codify present law as to the
priority of claims under section 507 or 726, except that the claim of a
foreign creditor under those sections shall not be given a lower priority than
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that of general unsecured claims without priority solely because the holder
of such claim is a foreign creditor.
(2)(A) Subsection (a) and paragraph (1) do not change or codify present
law as to the allowability of foreign revenue claims or other foreign public
law claims in a proceeding under this title.
(B) Allowance and priority as to a foreign tax claim or other foreign public
law claim shall be governed by any applicable tax treaty of the United
States, under the conditions and circumstances specified therein.
Sec. 1514. Notification to foreign creditors concerning a case under
this title
(a) Whenever in a case under this title notice is to be given to creditors
generally or to any class or category of creditors, such notice shall also be
given to the known creditors generally, or to creditors in the notified class or
category, that do not have addresses in the United States. The court may
order that appropriate steps be taken with a view to notifying any creditor
whose address is not yet known.
(b) Such notification to creditors with foreign addresses described in
subsection (a) shall be given individually, unless the court considers that,
under the circumstances, some other form of notification would be more
appropriate. No letter or other formality is required.
(c) When a notification of commencement of a case is to be given to
foreign creditors, such notification shall--
(1) indicate the time period for filing proofs of claim
and specify the place for filing such proofs of claim;
(2) indicate whether secured creditors need to file proofs
of claim; and
(3) contain any other information required to be included
in such notification to creditors under this title and the
orders of the court.
(d) Any rule of procedure or order of the court as to notice or the filing of
a proof of claim shall provide such additional time to creditors with foreign
addresses as is reasonable under the circumstances.
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SUBCHAPTER III--RECOGNITION OF A FOREIGN PROCEEDING
AND RELIEF
Sec. 1515. Application for recognition
(a) A foreign representative applies to the court for recognition of a
foreign proceeding in which the foreign representative has been appointed
by filing a petition for recognition.
(b) A petition for recognition shall be accompanied by(1)
a certified copy of the decision commencing such
foreign proceeding and appointing the foreign representative;
(2) a certificate from the foreign court affirming the
existence of such foreign proceeding and of the appointment of
the foreign representative; or
(3) in the absence of evidence referred to in paragraphs
(1) and (2), any other evidence acceptable to the court of the
existence of such foreign proceeding and of the appointment of
the foreign representative.
(c) A petition for recognition shall also be accompanied by a statement
identifying all foreign proceedings with respect to the debtor that are known
to the foreign representative.
(d) The documents referred to in paragraphs (1) and (2) of subsection (b)
shall be translated into English. The court may require a translation into
English of additional documents.
Sec. 1516. Presumptions concerning recognition
(a) If the decision or certificate referred to in section 1515(b) indicates
that the foreign proceeding is a foreign proceeding and that the person or
body is a foreign representative, the court is entitled to so presume.
(b) The court is entitled to presume that documents submitted in support
of the petition for recognition are authentic, whether or not they have been
legalized.
(c) In the absence of evidence to the contrary, the debtor's registered
office, or habitual residence in the case of an individual, is presumed to be
the center of the debtor's main interests.
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Sec. 1517. Order granting recognition
(a) Subject to section 1506, after notice and a hearing, an order
recognizing a foreign proceeding shall be entered if--
(1) such foreign proceeding for which recognition is
sought is a foreign main proceeding or foreign nonmain
proceeding within the meaning of section 1502;
(2) the foreign representative applying for recognition is
a person or body; and
(3) the petition meets the requirements of section 1515.
(b) Such foreign proceeding shall be recognized--
(1) as a foreign main proceeding if it is pending in the
country where the debtor has the center of its main interests;
or
(2) as a foreign nonmain proceeding if the debtor has an
establishment within the meaning of section 1502 in the foreign
country where the proceeding is pending.
(c) A petition for recognition of a foreign proceeding shall be decided upon
at the earliest possible time. Entry of an order recognizing a foreign
proceeding constitutes recognition under this chapter.
(d) The provisions of this subchapter do not prevent modification or
termination of recognition if it is shown that the grounds for granting it were
fully or partially lacking or have ceased to exist, but in considering such
action the court shall give due weight to possible prejudice to parties that
have relied upon the order granting recognition. A case under this chapter
may be closed in the manner prescribed under section 350.
Sec. 1518. Subsequent information
From the time of filing the petition for recognition of a foreign proceeding,
the foreign representative shall file with the court promptly a notice of
change of status concerning--
(1) any substantial change in the status of such foreign
proceeding or the status of the foreign representative's
appointment; and
(2) any other foreign proceeding regarding the debtor that
becomes known to the foreign representative.
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Sec. 1519. Relief that may be granted upon filing petition for
recognition
(a) From the time of filing a petition for recognition until the court rules
on the petition, the court may, at the request of the foreign representative,
where relief is urgently needed to protect the assets of the debtor or the
interests of the creditors, grant relief of a provisional nature, including--
(1) staying execution against the debtor's assets;
(2) entrusting the administration or realization of all or
part of the debtor's assets located in the United States to the
foreign representative or another person authorized by the
court, including an examiner, in order to protect and preserve
the value of assets that, by their nature or because of other
circumstances, are perishable, susceptible to devaluation or
otherwise in jeopardy; and
(3) any relief referred to in paragraph (3), (4), or (7)
of section 1521(a).
(b) Unless extended under section 1521(a)(6), the relief granted under
this section terminates when the petition for recognition is granted.
(c) It is a ground for denial of relief under this section that such relief
would interfere with the administration of a foreign main proceeding.
(d) The court may not enjoin a police or regulatory act of a governmental
unit, including a criminal action or proceeding, under this section.
(e) The standards, procedures, and limitations applicable to an injunction
shall apply to relief under this section.
(f) The exercise of rights not subject to the stay arising under section
362(a) pursuant to paragraph (6), (7), (17), or (27) of section 362(b) or
pursuant to section 362(n) shall not be stayed by any order of a court or
administrative agency in any proceeding under this chapter.
Sec. 1520. Effects of recognition of a foreign main proceeding
(a) Upon recognition of a foreign proceeding that is a foreign main
proceeding--
(1) sections 361 and 362 apply with respect to the debtor
and the property of the debtor that is within the territorial
jurisdiction of the United States;
(2) sections 363, 549, and 552 apply to a transfer of an
interest of the debtor in property that is within the
territorial jurisdiction of the United States to the same extent
that the sections would apply to property of an estate;
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(3) unless the court orders otherwise, the foreign
representative may operate the debtor's business and may
exercise the rights and powers of a trustee under and to the
extent provided by sections 363 and 552; and
(4) section 552 applies to property of the debtor that is
within the territorial jurisdiction of the United States.
(b) Subsection (a) does not affect the right to commence an individual
action or proceeding in a foreign country to the extent necessary to preserve
a claim against the debtor.
(c) Subsection (a) does not affect the right of a foreign representative or
an entity to file a petition commencing a case under this title or the right of
any party to file claims or take other proper actions in such a case.
Sec. 1521. Relief that may be granted upon recognition
(a) Upon recognition of a foreign proceeding, whether main or nonmain,
where necessary to effectuate the purpose of this chapter and to protect the
assets of the debtor or the interests of the creditors, the court may, at the
request of the foreign representative, grant any appropriate relief, including(1)
staying the commencement or continuation of an
individual action or proceeding concerning the debtor's assets,
rights, obligations or liabilities to the extent they have not
been stayed under section 1520(a);
(2) staying execution against the debtor's assets to the
extent it has not been stayed under section 1520(a);
(3) suspending the right to transfer, encumber or
otherwise dispose of any assets of the debtor to the extent this
right has not been suspended under section 1520(a);
(4) providing for the examination of witnesses, the taking
of evidence or the delivery of information concerning the
debtor's assets, affairs, rights, obligations or liabilities;
(5) entrusting the administration or realization of all or
part of the debtor's assets within the territorial jurisdiction
of the United States to the foreign representative or another
person, including an examiner, authorized by the court;
(6) extending relief granted under section 1519(a); and
(7) granting any additional relief that may be available
to a trustee, except for relief available under sections 522,
544, 545, 547, 548, 550, and 724(a).
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(b) Upon recognition of a foreign proceeding, whether main or nonmain,
the court may, at the request of the foreign representative, entrust the
distribution of all or part of the debtor's assets located in the United States
to the foreign representative or another person, including an examiner,
authorized by the court, provided that the court is satisfied that the interests
of creditors in the United States are sufficiently protected.
(c) In granting relief under this section to a representative of a foreign
nonmain proceeding, the court must be satisfied that the relief relates to
assets that, under the law of the United States, should be administered in
the foreign nonmain proceeding or concerns information required in that
proceeding.
(d) The court may not enjoin a police or regulatory act of a governmental
unit, including a criminal action or proceeding, under this section.
(e) The standards, procedures, and limitations applicable to an injunction
shall apply to relief under paragraphs (1), (2), (3), and (6) of subsection (a).
(f) The exercise of rights not subject to the stay arising under section
362(a) pursuant to paragraph (6), (7), (17), or (27) of section 362(b) or
pursuant to section 362(n) shall not be stayed by any order of a court or
administrative agency in any proceeding under this chapter.
Sec. 1522. Protection of creditors and other interested persons
(a) The court may grant relief under section 1519 or 1521, or may modify
or terminate relief under subsection (c), only if the interests of the creditors
and other interested entities, including the debtor, are sufficiently protected.
(b) The court may subject relief granted under section 1519 or 1521, or
the operation of the debtor's business under section 1520(a)(3), to
conditions it considers appropriate, including the giving of security or the
filing of a bond.
(c) The court may, at the request of the foreign representative or an
entity affected by relief granted under section 1519 or 1521, or at its own
motion, modify or terminate such relief.
(d) Section 1104(d) shall apply to the appointment of an examiner under
this chapter. Any examiner shall comply with the qualification requirements
imposed on a trustee by section 322.
Sec. 1523. Actions to avoid acts detrimental to creditors
(a) Upon recognition of a foreign proceeding, the foreign representative
has standing in a case concerning the debtor pending under another chapter
of this title to initiate actions under sections 522, 544, 545, 547, 548, 550,
553, and 724(a).
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(b) When a foreign proceeding is a foreign nonmain proceeding, the court
must be satisfied that an action under subsection (a) relates to assets that,
under United States law, should be administered in the foreign nonmain
proceeding.
Sec. 1524. Intervention by a foreign representative
Upon recognition of a foreign proceeding, the foreign representative may
intervene in any proceedings in a State or Federal court in the United States
in which the debtor is a party.
SUBCHAPTER IV--COOPERATION WITH FOREIGN COURTS AND
FOREIGN REPRESENTATIVES
Sec. 1525. Cooperation and direct communication between the court
and foreign courts or foreign representatives
(a) Consistent with section 1501, the court shall cooperate to the
maximum extent possible with a foreign court or a foreign representative,
either directly or through the trustee.
(b) The court is entitled to communicate directly with, or to request
information or assistance directly from, a foreign court or a foreign
representative, subject to the rights of a party in interest to notice and
participation.
Sec. 1526. Cooperation and direct communication between the
trustee and foreign courts or foreign representatives
(a) Consistent with section 1501, the trustee or other person, including an
examiner, authorized by the court, shall, subject to the supervision of the
court, cooperate to the maximum extent possible with a foreign court or a
foreign representative.
(b) The trustee or other person, including an examiner, authorized by the
court is entitled, subject to the supervision of the court, to communicate
directly with a foreign court or a foreign representative.
Sec. 1527. Forms of cooperation
Cooperation referred to in sections 1525 and 1526 may be implemented
by any appropriate means, including--
(1) appointment of a person or body, including an
examiner, to act at the direction of the court;
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(2) communication of information by any means considered
appropriate by the court;
(3) coordination of the administration and supervision of
the debtor's assets and affairs;
(4) approval or implementation of agreements concerning
the coordination of proceedings; and
(5) coordination of concurrent proceedings regarding the
same debtor.
SUBCHAPTER V--CONCURRENT PROCEEDINGS
Sec. 1528. Commencement of a case under this title after
recognition of a foreign main proceeding
After recognition of a foreign main proceeding, a case under another
chapter of this title may be commenced only if the debtor has assets in the
United States. The effects of such case shall be restricted to the assets of
the debtor that are within the territorial jurisdiction of the United States and,
to the extent necessary to implement cooperation and coordination under
sections 1525, 1526, and 1527, to other assets of the debtor that are within
the jurisdiction of the court under sections 541(a) of this title, and 1334(e)
of title 28, to the extent that such other assets are not subject to the
jurisdiction and control of a foreign proceeding that has been recognized
under this chapter.
Sec. 1529. Coordination of a case under this title and a foreign
proceeding
If a foreign proceeding and a case under another chapter of this title are
pending concurrently regarding the same debtor, the court shall seek
cooperation and coordination under sections 1525, 1526, and 1527, and the
following shall apply:
(1) If the case in the United States pending at the time
the petition for recognition of such foreign proceeding is
filed--
(A) any relief granted under section 1519 or 1521
must be consistent with the relief granted in the case
in the United States; and
(B) section 1520 does not apply even if such
foreign proceeding is recognized as a foreign main
proceeding.
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(2) If a case in the United States under this title
commences after recognition, or after the date of the filing of
the petition for recognition, of such foreign proceeding--
(A) any relief in effect under section 1519 or
1521 shall be reviewed by the court and shall be
modified or terminated if inconsistent with the case in
the United States; and
(B) if such foreign proceeding is a foreign main
proceeding, the stay and suspension referred to in
section 1520(a) shall be modified or terminated if
inconsistent with the relief granted in the case in the
United States.
(3) In granting, extending, or modifying relief granted to
a representative of a foreign nonmain proceeding, the court must
be satisfied that the relief relates to assets that, under the
laws of the United States, should be administered in the foreign
nonmain proceeding or concerns information required in that
proceeding.
(4) In achieving cooperation and coordination under
sections 1528 and 1529, the court may grant any of the relief
authorized under section 305.
Sec. 1530. Coordination of more than 1 foreign proceeding
In matters referred to in section 1501, with respect to more than 1
foreign proceeding regarding the debtor, the court shall seek cooperation
and coordination under sections 1525, 1526, and 1527, and the following
shall apply:
(1) Any relief granted under section 1519 or 1521 to a
representative of a foreign nonmain proceeding after recognition
of a foreign main proceeding must be consistent with the foreign
main proceeding.
(2) If a foreign main proceeding is recognized after
recognition, or after the filing of a petition for recognition,
of a foreign nonmain proceeding, any relief in effect under
section 1519 or 1521 shall be reviewed by the court and shall be
modified or terminated if inconsistent with the foreign main
proceeding.
(3) If, after recognition of a foreign nonmain proceeding,
another foreign nonmain proceeding is recognized, the court
shall grant, modify, or terminate relief for the purpose of
facilitating coordination of the proceedings.
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Sec. 1531. Presumption of insolvency based on recognition of a
foreign main proceeding
In the absence of evidence to the contrary, recognition of a foreign main
proceeding is, for the purpose of commencing a proceeding under section
303, proof that the debtor is generally not paying its debts as such debts
become due.
Sec. 1532. Rule of payment in concurrent proceedings
Without prejudice to secured claims or rights in rem, a creditor who has
received payment with respect to its claim in a foreign proceeding pursuant
to a law relating to insolvency may not receive a payment for the same
claim in a case under any other chapter of this title regarding the debtor, so
long as the payment to other creditors of the same class is proportionately
less than the payment the creditor has already received.