Foreign Representative Granted Avoidance Powers in Chapter 15 Case

In Fogerty v Petroquest Resources Inc (In re Condor Ins Ltd)(1) the Fifth Circuit Court of Appeals held that, pursuant to Section 1521 of the Bankruptcy Code, the foreign representatives of Condor Insurance Ltd (appointed by the Nevis court) could use Nevis law in a Chapter 15 case to avoid asset transfers by Condor to a US affiliate, even though the foreign representatives could not have avoided the transfers under US law. The court found that "[w]hatever its full reach, Chapter 15 does not constrain the federal court's exercise of the powers of foreign law it is to apply". In doing so, the court reversed the judgment of the US District Court for the Southern District of Mississippi, which had affirmed the bankruptcy court's dismissal of an adversary proceeding predicated on Nevis law for lack of subject matter jurisdiction. Read More..