Document Type
Research Memorandum
Publication Date
2020
Abstract
(Excerpt)
Section 109(a) of title 11 of the United States Code (the “Bankruptcy Code”) states that “only a person that resides or has a domicile, a place of business, or property in the United States … may be a debtor under this title.” While a “foreign entity or individual domiciled abroad but owning property or doing business in the United States is eligible to be a debtor under 11 U.S.C. § 109,” the requirement can be difficult if the foreign entity or individual domiciled abroad has no commercial connection to the US. Consequently, the property component of Section 109(a) has become an important means to satisfy the debtor eligibility requirement. The ability to satisfy the Section 109(a) has been aided by the court’s broad interpretation of the term ‘property,’ highlighted by the use of intangible property to satisfy the requirement. Intangible property is property that lacks a physical existence. Intangible property has no intrinsic value but instead its value exists in the rights conveyed to the property. Examples of intangible property include bank accounts, stocks, bonds, and contractual rights. Part I of this memorandum discusses the evolution of the property requirement under Section 109(a) for foreign debtors. Part II of this memorandum focuses on the development of intangible property as a means to satisfy Section 109(a).