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Utilizing a relatively new and still-evolving chapter of the U.S. Bankruptcy Code, a Chinese company embroiled in bankruptcy proceedings back home won a U.S. court order earlier this month that protects about 275,000 solar panels worth millions of dollars stored in a Bridgeton, N.J., warehouse.

U.S. Chief Bankruptcy Judge Gloria Burns of the District of New Jersey issued the order in the case under Chapter 15, which was added to the Bankruptcy Code as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Burns’ order, issued Aug. 12 in In re Zhejiang Topoint Photovoltaic Co., stays enforcement of judgment or writ of execution against the panels as well as any action to transfer, encumber or dispose of them.

In a separate order that same day, she set aside some panels as security for a company claiming an interest in them and set a Sept. 18 hearing date.

Zhejiang Topoint Photovoltaic Co. Ltd.’s lawyer, Stephen Packman of Archer & Greiner in Haddonfield, N.J., said he believes it to be the first Chapter 15 filing by mainland China debtors in a Chinese bankruptcy.

Chapter 15 was meant to deal with bankruptcies brought in other countries by businesses that have assets, creditors and other interested parties in the United States, and to enable cooperation between courts in cross-border bankruptcies.

It is based on a model law promulgated by the U.S. Commission for International Trade Law that has been adopted not just in the United States, but also in Great Britain, Australia, Japan, Mexico, Poland, South Korea, Canada, Greece and other countries.

The law was drafted in response to the expansion of international trade and the growth of multinational enterprises, which have led to increases in the number of transnational insolvencies.

“The critical importance of Chapter 15 is to create a more universal approach to international cooperation between courts and, at the same time, create a more systematic way for American courts to understand when they are supposed to accord comity and deference to a foreign insolvency proceeding,” Michael Schaedle of Blank Rome in Philadelphia said. “It has enabled better results for distressed companies throughout the world.”

Foreign companies can access the ancillary jurisdiction of American bankruptcy courts while U.S. companies can access reciprocal systems in countries that have also adopted the model law, Schaedle added.

Chapter 15 allows an overseas debtor or an authorized representative such as a trustee or receiver to obtain recognition of the foreign proceeding, gaining such benefits as an automatic stay, standing to bring suits here and the ability to conduct discovery, operate the debtor’s business, sell assets and use cash collateral. One thing they cannot do, however, is sue to avoid preferential transfers.

A Chapter 15 case begins the same way as any other type of bankruptcy—by filing a petition, which must be accompanied by documents showing the existence of the foreign proceeding.

After notice and a hearing, the court can deny the petition or recognize the overseas bankruptcy as either a “foreign main proceeding”—if it is taking place in a country where the debtor’s main interests are located—or a “foreign non-main proceeding.” The chief difference is that the automatic stay is not automatic for non-main proceedings.

In contrast to other kinds of bankruptcies, where the automatic stay kicks in as soon as the petition is filed, it is not triggered in Chapter 15 until recognition of the foreign proceeding, leading some petitioners to ask for provisional injunctive relief to cover the “gap period.”

Through June 30, almost 780 cases have been filed around the country, the vast majority in the Southern District of New York, with more than 250, and the District of Delaware, with almost 230.

New Jersey has had 16, 14 of which were filed between July 1, 2008, to June 30, 2009, the same period when they peaked nationally at 146, in the face of the global economic crisis.

One of the more well–known companies to have utilized Chapter 15 is MtGox Co. of Tokyo, once said to be the world’s largest bitcoin exchange.

It filed for bankruptcy in Japan this past February, after revealing the loss of 850,000 bitcoins worth more than $400 million in a hacking attack, though it subsequently said it located 200,000 of them.

In March, the trustee appointed by the Japanese court filed a Chapter 15 petition in the Northern District of Texas, and received provisional relief, including automatic stay protection, one day later.

The petition was granted June 17.

One question courts have been grappling with is whether Chapter 15 is subject to the Section 109(a) bankruptcy requirement that a debtor have a domicile, residence, place of business or property in the United States.

Francisco Vazquez, of Chadbourne & Parke in New York, said he has had more than 30 Chapter 15 cases, including one in which client Octaviar Pty Ltd. of Australia was granted recognition in the Southern District in 2012 only to have the U.S. Court of Appeals for the Second Circuit reverse last Dec. 11, holding as a matter of first impression that Section 109(a) applied and was not satisfied.

After Octaviar filed a new petition asserting property interests in the form of claims and causes of action against U.S. entities, the bankruptcy court once again granted recognition, finding Section 109(a) was satisfied.

Six days after the Second Circuit held that Section 109(a) applied, a bankruptcy judge in Delaware reached the opposite conclusion, saying he disagreed and thought the Third Circuit would too.

Another issue being litigated is how to decide what is a foreign debtor’s “center of main interests” in order to differentiate between main and non-main proceedings.

The Second Circuit held in April 2013 that the location of a foreign debtor’s center of main interests should be determined as of the Chapter 15 filing date rather than by looking at the debtor’s 18-year operating history and that liquidation activities can be considered.

It affirmed a ruling that Fairfield Sentry, a feeder fund known for investing billions with Bernie Madoff, was centered in the British Virgin Islands and thus recognized its liquidation there as a foreign main proceeding, allowing it to invoke the automatic stay in a shareholder derivative suit in New York state court.

Vazquez said he believes a big area of contention will be a provision allowing courts to refuse to take action contrary to U.S. public policy.

In July 2011, a Southern District of New York bankruptcy judge refused to allow a representative of a German debtor access to the debtor’s emails stored on U.S. Internet service provider servers. “This is one of the rare cases in which an order of recognition on the terms requested would be manifestly contrary to U.S. public policy, reflected in rights that are based on fundamental principles of protecting the secrecy of electronic communications, limiting the powers of an estate representative and providing notice to parties whose rights are affected by a court order,” the judge said.

Several courts confronted with public policy objections have refused relief based on a different Chapter 15 provision, which requires protection of creditors.