{{USBankruptcy Chapter 15, Title 11, United States Code

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor ...

code that deals with

jurisdiction Jurisdiction (from Latin 'law' + 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, areas of jurisdiction apply to local, state, and federal levels. Jur ...

in certain bankruptcy cases. Under Chapter 15, a representative of a corporate bankruptcy proceeding outside the United States can obtain access to the U.S. courts. This allows cooperation between the United States courts and the foreign courts, as well as other authorities of foreign countries involved in cross-border insolvency cases.

Jurisdiction issues

It happens with increasing frequency that a

proceeding in one

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has a connection to assets or information located in another. Because of the involvement of multiple jurisdictions, unique problems arise, and in response, the United States enacted Section 304 of the U.S. Bankruptcy Code in 1978. Section 304 was repealed in 2005 and replaced with Chapter 15, titled "Ancillary and Other Cross Border Cases". This section has increased the range of options available in the United States in support of foreign bankruptcy proceedings.

UNCITRAL

Chapter 15 incorporates the Model Law on Cross Border Insolvency drafted by the

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. The law provides solutions to problems which arise in connection with cross-border bankruptcy, allowing US courts to issue

subpoena A subpoena (; also subpœna, supenna or subpena) or witness summons is a writ issued by a government agency, most often a court, to compel testimony by a witness or production of evidence under a penalty for failure. There are two common types of ...

s, orders to turn over assets, stays on pending actions, and orders of other types as circumstances dictate. The ancillary proceeding permitted under Chapter 15 is often a more efficient and less costly alternative to initiating an independent bankruptcy proceeding in the United States. Chapter 15 also avoids conflicts and establishes mechanisms for cooperation between US and foreign courts and representatives regarding proceedings which involve the same

debtor A debtor or debitor is a legal entity (legal person) that owes a debt to another entity. The entity may be an individual, a firm, a government, a company or other legal person. The counterparty is called a creditor. When the counterpart of this ...

Discretionary assistance

Whether the US courts will extend the "additional assistance" sought in connection with a foreign proceeding under Chapter 15 is a matter of discretion. The main consideration US courts will take into account in making this decision is whether the laws of the foreign jurisdiction violate the laws or public policy of the United States and whether the foreign courts conduct their proceedings according to basic rules of procedural fairness. Among other factors the US courts will consider is how the foreign jurisdiction treats

creditor A creditor or lender is a party (e.g., person, organization, company, or government) that has a claim on the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property ...

s, whether it prevents fraudulent transfer of debtor's property, whether US creditors are protected against prejudice in the processing of their claims in the other country, and the manner in which assets are distributed. The court may conduct an evidentiary hearing, including considering

expert testimony An expert witness, particularly in common law countries such as the United Kingdom, Australia, and the United States, is a person whose opinion by virtue of education, training, certification, skills or experience, is accepted by the judge as ...

, to determine whether those and other factors are satisfied.

Original Chapter 15 (1978–1984)

The original 1978 Bankruptcy Code had a different Chapter 15 dealing with the

United States Trustee Program The United States Trustee Program is a component of the United States Department of Justice that is responsible for overseeing the administration of bankruptcy cases and private trustees. The applicable federal law is found at and , et seq. In ...

, which it established as a trial in some judicial districts to assume roles which formerly belonged to the bankruptcy judge and others, including the selection and oversight of private trustees in individual cases. At that time, the other chapters of the Bankruptcy Code described how bankruptcy worked in districts without United States Trustees; original Chapter 15 modified the text of the other chapters for districts with United States Trustees. Section numbers in original Chapter 15 incorporated the section numbers in the main Code that they modified; for example, section 151325 (a section of original Chapter 15) modified section 1325, which sets the requirements of

Chapter 13 Title 11 of the United States Code sets forth the statutes governing the various types of relief for bankruptcy in the United States. Chapter 13 of the United States Bankruptcy Code provides an individual with the opportunity to propose a plan of ...

plans. Since the trial program was considered a success, Congress in 1984 ordered the creation of United States Trustees in all states except

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and

North Carolina North Carolina () is a state in the Southeastern region of the United States. The state is the 28th largest and 9th-most populous of the United States. It is bordered by Virginia to the north, the Atlantic Ocean to the east, Georgia and So ...

. Since original Chapter 15 is now applied in most states, its text was then merged into the main Bankruptcy Code; separate provisions were enacted for Alabama and North Carolina, where other officers of the court assume the role of the United States Trustee.

External links

Chapter 15 of Title 11 at LII-Cornell
Title 11 of the United States Code United States bankruptcy legislation