Chapter 15 petitions seeking recognition in the United States of foreign bankruptcy proceedings have increased significantly during the more than 16 years since chapter 15 was enacted in 2005. Among the relief commonly sought in such cases is discovery concerning the debtor's assets or asset transfers involving U.S.-based entities. A nonprecedential ruling recently handed down by the U.S. Court of Appeals for the Eleventh Circuit has created a circuit split on the issue of whether discovery orders entered by a U.S. bankruptcy court in a chapter 15 case are immediately appealable.
U.S. courts have a long-standing tradition of recognizing or enforcing the laws and court rulings of other nations as an exercise of international "comity." It has been generally understood that recognition of a foreign bankruptcy proceeding under chapter 15 is a prerequisite to a U.S. court enforcing, under the doctrine of comity, an order or judgment entered in a foreign bankruptcy proceeding or a provision in foreign bankruptcy law applicable to a debtor in such a proceeding.
In cases under both chapter 15 of the Bankruptcy Code and its repealed predecessor, section 304, U.S. bankruptcy courts have routinely recognized and enforced orders of foreign bankruptcy and insolvency courts as a matter of international comity. However, U.S. bankruptcy courts sometimes disagree over the precise statutory authority for granting such relief, because the provisions of chapter 15 are not particularly clear on this point in all cases.
To proceed against a debtor's personal property in Guernsey, customary law remedies are used. These start with the arrest of a debtor's goods and enable all creditors to share in the proceeds in the event that the monies owed are greater than the debtor's assets.
In order to proceed against a debtor's personal property in Guernsey, customary law remedies are used which start with the arrest of a debtor's goods but which allow all creditors to share in the proceeds in the event that the monies owed are greater than the debtor's assets.
Arrêts
Once judgment is obtained against a debtor, the 'arresting creditor', will either:
Saisie (meaning "to seize") is a court driven, Guernsey customary law process, governed by the Saisie Procedure (Simplification) (Bailiwick) Order, 1952. It is a three stage post judgment process which enables a creditor to enforce their rights against the debtor's realty in Guernsey.
Q4 2020 and Q1 2021 saw some significant developments in offshore restructuring, insolvency and corporate recovery, with the passage of new legislation and the handing down of judgments providing welcome clarification on laws relevant to practitioners in this area.
The EMEA Determinations Committee's recent bankruptcy determination involving Selecta CDS provides additional insight on the types of chapter 15 filings that are likely to trigger Credit Events.
In Short
The Situation: On August 11, 2020, a Credit Derivatives Determinations Committee for EMEA ("DC") unanimously determined that the Chapter 15 filing by British retailer Matalan triggered a Bankruptcy Credit Event under standard credit default swaps ("CDS").
The Result: The DC's decision diverged from its only prior decision (involving Thomas Cook) on whether a Chapter 15 petition constituted a Bankruptcy Credit Event.
For the benefit of our clients and friends investing in European distressed opportunities, our European Network is sharing some current developments.
Recent Developments