Although its Israel-based electric car company had already filed bankruptcy in its home country, Better Place, Inc., the U.S. parent of the foreign debtor, filed for protection under chapter 15 of the Bankruptcy Code with the United States Bankruptcy Court for the District of Delaware earlier this summer, in the hopes of obtaining protection of its U.S. assets while the foreign bankruptcy was being administered.

BPI, founded by Shai Agassi in 2007, aimed at creating affordable mass-market electric cars by allowing consumers to purchase vehicles without batteries. The company planned to establish a network of “switching stations” where drivers could swap out depleted batteries with fully charged ones. Unfortunately, the company overextended itself by trying to expand in multiple countries all over the world (including the U.S.) at the same time, ultimately leading it to file for bankruptcy.

Chapter 15 is essentially an ancillary proceeding that takes place in the United States while the main bankruptcy pends in a foreign state. Thus, the chapter 15 that BPI filed in the United States Bankruptcy Court is ancillary to the main bankruptcy that is proceeding in Israel. The parallel proceedings are facilitated by the appointment of a “foreign representative”—in this case, BPI’s foreign representatives, Shaul Kotler and Sigal Rozen-Rechav, stated that they needed the U.S. court’s protection in order to prevent certain creditors from employing collection efforts that would derail the “orderly determination of claims and the fair distribution of assets” in the proceeding in Israel.

More specifically, BPI’s foreign representatives averred to the Bankruptcy Court that it would “suffer immediate and irreparable harm if the commencement or constitution of actions against it and its assets [were] not enjoined.” The foreign representatives further claimed to the Bankruptcy Court that some creditors had already attempted to initiate an involuntary bankruptcy proceeding for its Dutch affiliate, nothing that “[i]t appears that the piecemeal picking apart of Better Place’s assets has already begun.”

On July 23, 2013, the Court entered a temporary restraining order, finding that the foreign representatives had demonstrated “a material risk that BPI will suffer irreparable harm to the value of its assets pending disposition of the Chapter 15 Petition from the enforcement and collection efforts of creditors.” The court also held that without entry of its order, “BPI’s ability to effectuate an orderly liquidation of its global enterprise will be jeopardized and may be lost altogether.”