Document Type
Research Memorandum
Publication Date
2017
Abstract
(Excerpt)
A foreign representative must obtain recognition of a foreign proceeding pursuant to section 1517 of title 11 of the United States Code (the “Bankruptcy Code”) prior to applying directly to a court in the United States for any relief such as operating the debtor’s business operations in the U.S. or seeking assets and discovery from U.S. entities. However, under section 1509(f), a foreign representative may sue in a United States court to collect or recover a claim which is the property of the debtor without first obtaining recognition. The scope of this exception, though, remains unclear.
This memorandum explores whether recognition under chapter 15 of the Bankruptcy Code is a prerequisite for a foreign liquidator or debtor to bring litigation in the U.S. Part I discusses the general requirement of recognition under section 1509 before a foreign representative can bring a suit in U.S. courts. Part II provides a brief overview of the cases where the courts have allowed foreign representatives to circumvent the recognition requirement. Part III concludes by highlighting the scope and desirability of the section 1509(f) exception after exploring its possible interpretations.