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Corinne Ball is a partner at Jones Day. Corinne Ball

Global capital markets and distress investors are responsible for major developments in restructuring across jurisdictions. Frequently, bond debt issued by the holding company of a foreign enterprise and guaranteed by its offshore operating subsidiaries is subject to New York law. If the issuer or guarantors become distressed, the issuer or guarantors often look to restructure in a common law jurisdiction that has schemes of arrangement. Assuming such distressed enterprise can go to a “scheme jurisdiction,” it will attempt a restructuring offshore and then bring the “sanctioned” or approved scheme to the United States for recognition and enforcement under Chapter 15 of the Bankruptcy Code. Most commentators believe that with sufficient process and procedures, a scheme that has features that are permissible under the scheme jurisdiction—but not acceptable under Chapter 11—can be recognized and enforced under Chapter 15 of the Bankruptcy Code.

 

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