2nd Circuit Defines 'Center Of Main Interests' In Chapter 15

A federal appeals court has resolved a split among judges in U.S. Bankruptcy Court in Manhattan that could help determine when recognition as a foreign main proceeding should be granted in Chapter 15 bankruptcy petitions, Thomson Reuters News & Insight reported. The ruling by the 2nd U.S. Circuit Court of Appeals also helped clarify that liquidators of investment funds chartered offshore will not be precluded from U.S. courts under Chapter 15. The ruling determined that judges should look to the location of a company's "center of main interests" at the time of its Chapter 15 petition to determine if it qualifies for recognition as a foreign main proceeding by U.S. courts. Such recognition allows foreign companies to benefit from the automatic stay of legal action against them in the United States. It also clears the way for a U.S. bankruptcy judge to assist the foreign insolvency action. Read more.