Under Chapter 15 of title 11 of the United States Code (the “Bankruptcy Code”), a court can recognize a foreign bankruptcy, insolvency, or restructuring proceeding (i.e., a foreign proceeding) as either a “foreign main proceeding” or a “foreign nonmain proceeding.” The Bankruptcy Code defines a foreign main proceeding as “a foreign proceeding pending in the country where the debtor has the center of its main interests.” The Bankruptcy Code does not define the “center of main interest” or “COMI.” Thus, bankruptcy courts have formulated different definitions and factors to determine a debtor’s COMI.
Complex corporate structures have made it difficult for courts to determine a debtor’s COMI. Unlike other chapters of the Bankruptcy Code, there is no affiliate filing rule in Chapter 15. And Chapter 15 is silent as to how to determine the COMI of a group of companies. Recently, the United States Bankruptcy Court for the Southern District of New York determined a debtor’s COMI in an integrated enterprise by examining each member individually, instead of the debtor group as a whole.
This memorandum analyzes how bankruptcy courts ascertain a debtor’s COMI when the debtors are members of an affiliated group of companies. Part I explains the factors courts use to determine the COMI for a foreign debtor. Part II examines the method courts use to determine the COMI of a debtor that is a member of a group of affiliated companies.