Chapter 15 of title 11 of the United States Code (the “Bankruptcy Code”) governs the process for obtaining recognition of foreign insolvency proceedings in the U.S. Section 1517 governs recognition of foreign proceedings and addresses two distinct, but related, issues: (1) whether a court must recognize a foreign court’s foreign proceeding; and (2) whether a court may modify or terminate a prior recognition of a foreign proceeding. This memorandum analyzes the second issue, which is governed by §1517(d) of the Bankruptcy Code.
This memorandum first examines the scope of §1517(d) and whether and when a court may modify or terminate a prior recognition. Next, this memorandum discusses the various factors courts will likely consider in determining whether to modify or terminate a prior recognition based on existing case law.