Chapter 15 of the Bankruptcy Code provides a mechanism for a foreign debtor or representative in non-U.S. insolvency proceedings to protect such debtor’s U.S. assets from U.S. creditors’ collection actions or to stay any litigation commenced in the U.S. The ultimate goal in a chapter 15 proceeding is to preserve the value of the assets of the foreign debtor for the benefit of all its creditors globally.

Chapter 15 prevents piecemeal (and potentially contrary) adjudication relating to the same insolvent estate. It also prevents inequitable distributions to creditors of the same estate located in different countries, which may otherwise receive different distributions based on local law. Finally, it encourages better cooperation between courts in different countries, with an eye toward a globally efficient administration of all the foreign debtor’s assets.

The Honourable Louise Adler has been a federal judge in the United States Bankruptcy Court for the Southern District of California since 1984. She has written the Guide for fellow judges who do not have her extensive experience in dealing with chapter 15 cases. The Guide would be also very helpful to any U.S. attorneys filing a chapter 15 petition to understand how to best present their case to the courts and to any foreign lawyers considering whether the filing of a chapter 15 case would assist their efforts in their non-U.S. insolvency proceedings.

The Guide is divided into five major sections. Part I of the Guide assists in understanding the process of recognition, including how to deal with requests for interim relief while the recognition process is under way. Part II of the Guide addresses the problems and considerations of operating a business in chapter 15. Parts III and IV address court-to-court communication including cross-border agreements or protocols, and claims issues. Part V discusses the bankruptcy court jurisdiction in chapter 15 cases.

The Guide is very well written and has considerable depth. It summarises in a concise but thorough fashion all the significant issues bankruptcy courts have faced since the enactment of chapter 15 in 2005. The First Edition of the Guide was published in 2011 and this Second Edition has been updated and expanded to include cases decided up to December 31, 2013. Since chapter 15 is a relatively new statute, case law has been evolving very rapidly and a number of significant cases were decided in 2014. We look forward to the future Third Edition of the Guide.

Click here to read this article in French.

This Book Review was first published in the Winter 2014/5 edition of Eurofenix, The Journal of Insol Europe.