A recent decision of the Second Circuit Court of Appeals has added an additional eligibility requirement for the filing of Chapter 15 cases. In Drawbridge Special Opportunities Fund LP v. Barnet (In re Barnet), ___ F.3d ___, 2013 WL 6482499 (2d Cir. 12/11/2013), the Court applied the section 109 requirement that the residence, domicile, place of business, or assets of the debtor be in the United States in order for its foreign representative to obtain recognition of proceedings instituted under Chapter 15. Reversing the bankruptcy judge on direct appeal, the Court held that since the debtor in Barnet had no United States assets, recognition of the foreign main bankruptcy proceeding pending in Australia was improper. While this decision will not affect most of the Chapter 15 cases that are brought to administer assets located in the United States, it will be important in cases like Barnet where the Chapter 15 proceeding was instituted to obtain discovery or other relief against persons or entities in the United States.
Location