Document Type
Research Memorandum
Publication Date
2025
Abstract
(Excerpt)
In the absence of Chapter 15 recognition, foreign debtors may still rely on the doctrine of adjudicatory comity for recognition of a foreign order in some instances. However, because of the limitations on the applicability of adjudicatory comity alone, Chapter 15 recognition may be a safer option for foreign debtors.
In 2005, Congress enacted Chapter 15 under Title 11 of the United States Code (the "Bankruptcy Code") to "provide effective mechanisms for dealing with cases of cross-border insolvency." Under Chapter 15, a foreign representative may apply to the court for recognition of a foreign bankruptcy proceeding. Upon recognition of a main foreign proceeding, most U.S. litigation against the debtor will be automatically stayed.5 Also, regardless of whether the foreign proceeding is "main or nonmain," the court may grant additional appropriate relief.
Some foreign debtors have sought relief by invoking the doctrine of adjudicatory comity instead of applying for Chapter 15 recognition.
This article analyzes the doctrine of adjudicatory comity in relation to foreign bankruptcy proceedings. Part I discusses the background of adjudicatory comity. Part II explores how courts have applied adjudicatory comity to foreign bankruptcy proceedings, in the absence of Chapter 15 recognition. Part III addresses the limitations of adjudicatory comity. Finally, this article concludes that while adjudicatory comity may be useful for some foreign debtors, Chapter 15 recognition is still a safer option.