Established in 2015 as a trusted neutral forum to meet increasing demand for effective transnational dispute resolution, the Singapore International Commercial Court (the "SICC") is a division of the General Division of the High Court and part of the Supreme Court of Singapore. On January 18, 2024, the SICC handed down its first insolvency-related ruling.

In Short

Debtors in non-U.S. bankruptcy or restructuring proceedings commonly seek to shield their U.S. assets from creditor collection efforts by seeking "recognition" of those proceedings in the United States in a case under chapter 15 of the Bankruptcy Code. If a U.S. bankruptcy court recognizes the debtor's foreign proceeding, the Bankruptcy Code's automatic stay prevents creditor collection efforts, including the commencement or continuation of any U.S. litigation involving the debtor or its U.S. assets. A U.S.

One year ago, we wrote that 2022 would be remembered in the corporate bankruptcy world for the "crypto winter" that descended in November 2022 with the spectacular collapse of FTX Trading Ltd., Alameda Research, and approximately 130 other affiliated companies that ignited the meltdown of many other platforms, exchanges, lenders, and mining operations because they did business with FTX.

We have previously blogged about the section 546(e) defense to a trustee’s avoidance powers under the Bankruptcy Code. A trustee has broad powers to set aside certain transfers made by debtors before bankruptcy. See 11 U.S.C. §§ 544, 547, 548. Section 546(e), however, bars avoiding certain transfers, including a “settlement payment . . . made by or to (or for the benefit of) . . . a financial institution [or] a transfer made by or to (or for the benefit of) a . . . financial institution . . . in connection with a securities contract.” 11 U.S.C. § 546(e).

In most cases seeking recognition of a foreign bankruptcy proceeding in the United States under chapter 15 of the Bankruptcy Code, the foreign debtor's "foreign representative" has been appointed by the foreign court or administrative body overseeing the debtor's bankruptcy case.

Federal law assigns to U.S. district courts original jurisdiction over all cases under Title 11 (the Bankruptcy Code) and all civil proceedings arising under Title 11 or arising in or relating to Title 11. See 28 U.S.C. § 1334(a), (b). Federal law permits each U.S. district court to refer such cases and civil proceedings to bankruptcy courts, and district courts generally do so. But bankruptcy courts, unlike district courts, are not courts under Article III of the Constitution, and are therefore constrained in what powers they may constitutionally exercise.

Section 544(b)(1) of the Bankruptcy Code enables a trustee to step into the shoes of a creditor and avoid a transfer “of an interest of the debtor in property” that an unsecured creditor could avoid under applicable state law. See 11 U.S.C. § 544(b)(1). Thus, for example, if outside of bankruptcy a creditor could avoid a transaction entered by a debtor as a fraudulent transfer, in bankruptcy, the trustee acquires the power to avoid such a transaction.

In In re Golden Sphinx Ltd., 2023 WL 2823391 (Bankr. C.D. Cal. Mar. 31, 2023), the U.S. Bankruptcy Court for the Central District of California denied a motion filed by a creditor of a chapter 15 debtor seeking discovery from a bank that had provided financing to one of the debtor's affiliates.

Corporate restructurings are not always successful for many reasons. As a consequence, the bankruptcy and restructuring laws of the United States and many other countries recognize that a failed restructuring may be followed by a liquidation or winding-up of the company, either through the commencement of a separate liquidation or winding-up proceeding, or by the conversion of the restructuring to a liquidation. Chapter 15 of the Bankruptcy Code expressly contemplates that the status of a recognized foreign proceeding may change, and that a U.S.