Document Type
Research Memorandum
Publication Date
2025
Abstract
(Excerpt)
Upon a petition for recognition, a foreign insolvency case may be recognized in the United States under chapter 15 of title 11 of the United States Code (the "Bankruptcy Code"). Courts are divided as to whether section 109(a)’s debtor eligibility requirements, which apply to U.S. bankruptcy cases, apply to a chapter 15 case. In the Second Circuit, a foreign representative will have to demonstrate that the debtor satisfies section 109(a)’s requirement of being "a person who resides or has a domicile, a place of business, or property in the United States, or a municipality," while debtors situated in the Eleventh Circuit likely will not.
This article analyzes the circuit split between the Second and Eleventh Circuits regarding the applicability of section 109(a) to recognition of a foreign proceeding in the U.S. under chapter 15. Part I discusses the Second Circuit’s approach and Barnet’s holding that section 109(a) doesapply because a plain reading of the statute implies that chapter 1 of the Bankruptcy Code applies to the entire Bankruptcy Code including chapter 15. Part II discusses the Eleventh Circuit’s approach and Al Zawawi’s holding that that 109(a) does not apply because there was precedent on point in that circuit (In re Goerg). Goerg held that the debtor need not satisfy section 109(a) because the statutory scheme ought to be construed broadly to effectuate Congress’ intent to facilitate the resolution of cross border cases in the United States. Part III explains that even where section 109(a) applies, its requirements are minimal and easily satisfied in various ways.