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Read This Before Filing For Chapter 15

Chapter 15 Background

The vast majority of business-oriented cases heard under provisions of United States bankruptcy law today are under Chapter 7 and Chapter 11 of the U.S. Bankruptcy Code. Chapter 15 of Title 11 of the United States Code, like many pieces of Federal legislation addressing inter-country policies, draws influence from conventions of international law. Chapter 15 bankruptcy owes a large debt to the United Nations Commission on International Trade Law (UNCITRAL).

Seeing as Chapter 15 deals with international matters, though, there must be mutual recognition between countries involved in any such negotiation. Thus, using UNCITRAL as a reference point, foreign nations invoked in a Chapter 15 bankruptcy case must have their own internal legislation similar to Chapter 15 on the books, and at the same time, must recognize the authority of the legal language of Chapter 15 bankruptcy law. In other words, though a written accord between two nations may not be necessary, there is an implicit contract at works in Chapter 15 hearings.

Chapter 15 bankruptcy law employs some very specific terminology as it is written. Of course, the terms "debtor" and "trustee" are well-known to students of bankruptcy law, but other distinctions like "foreign main proceedings" (cases in foreign courts where a corporation does the majority of its business) versus "foreign non-main proceedings" (pending cases in non-main countries where that entity has established assets) beckon careful study by potential applicants. In fact, in trying to get a hold on Chapter 15 law, one may need to understand multiple sets of terms used across jurisdictions.

NEXT: What You Need to Know About the Filing Process and Jurisdictional Concerns

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