Chapter 15 of the Bankruptcy Code provides a mechanism for a company in a foreign insolvency or debt-adjustment proceeding to seek injunctive relief against litigation in U.S. courts or U.S. bankruptcy court assistance in the administration and protection of its U.S. assets. To commence a Chapter 15 case, a petition seeking recognition of the foreign insolvency proceeding must be filed with a U.S. bankruptcy court. Such petition is filed by a foreign representative who is authorized in the foreign proceeding to administer the debtor's assets or to act as the debtor's representative. A request for provisional injunctive relief, such as a temporary restraining order, often accompanies the petition.
The first crucial issue in any Chapter 15 case is whether the foreign liquidators will be able to obtain recognition of the foreign proceeding and, if they do, whether such proceeding will be recognized as a foreign main or nonmain proceeding. The resolution of this threshold issue will determine whether the foreign liquidators can gain access to U.S. courts and seek Chapter 15 relief. A foreign proceeding qualifies as a foreign main proceeding if it is pending in the country where the debtor has its "center of main interests" or COMI. A foreign proceeding qualifies as a foreign nonmain proceeding if it is pending in a country where the debtor has an establishment, defined as any place of operations where the debtor carries out a nontransitory economic activity.
