International Insolvency

At present, investing in Mainland China is a double-edged sword, primarily because the potentially substantial economic opportunities can be offset by the practical obstacles resulting from rule of law issues when deals go bad. However, a recent agreement between the courts of Hong Kong and Mainland China to reciprocally enforce one another’s judgments could provide a significant boost to investor confidence in the region. Continue Reading Hong Kong Judgments to be Enforced by Mainland China Courts: Is the Divide Between Two Systems Within One Country Shrinking?

In Koreag, Controle et Revision S.A. v. Refco F/X Assocs., Inc. (In re Koreag), 961 F.2d 341, 349 (2d Cir. 1992), the Second Circuit Court of Appeals held previously that questions of ownership of a debtor’s property that is claimed to be part of a foreign bankruptcy estate may be resolved by local courts under local rules because international comity does not require deference to the parallel foreign proceeding. But in JPMorgan Chase Bank v. Altos Hornos De Mexico," 412 F. 3d 418, 425 (2d Cir. 2005) (2d Cir. 2005), the Second Circuit recently held that the Koreag exception that ownership of property may be addressed before comity is given to the parallel foreign proceeding only applies to disputes that present a bona fide dispute regarding property ownership. Absent such a dispute, local rules are displaced and deference to the foreign court is appropriate so long as the foreign proceedings are procedurally fair and do not contravene the laws or public policy of the United States.
Continue Reading International Comity Requires Deference to Foreign Insolvency Proceedings

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 adds to the U.S. Bankruptcy Code a new Chapter 15 to govern cross-border cases. Chapter 15 represents a significant departure from former Section 304 of the U.S. Bankruptcy Code, which is to be replaced in its entirety. A few of Chapter 15’s key provisions are summarized below.
Continue Reading The Bankruptcy Act Adds New Chapter 15 to Govern Cross-Border Insolvency Cases