7. Protecting the Creditors and Other Interested Parties

Chapter 15's infrastructure accounts for protections of creditors and other interested parties. Foreign creditors are guaranteed the same rights as domestic creditors under any Title 11 case*(235). Moreover, Chapter 15 and the Federal Rules of Bankruptcy Procedure ensure proper notice to foreign creditors with additional time for foreign creditors, with additional time for foreign creditors in some instances*(236).

Under 11 U.S.C. §§ 1519 and 1521, relief granted must "sufficiently" protect the interests of creditors and other interested parties, including the debtor*(237). Courts have fairly broad discretion under the Bankruptcy Code. Under Section 1522(a), the court may only grant discretionary relief under 11 U.S.C. § 1521 if the interests of the creditors are sufficiently protected*(238). Section 1522(b) allows the court to impose conditions on discretionary relief, such as posting security or a bond*(239). In In re Tri-Continental Exchange, the Court clarified that "[standards that inform [sic] the analysis of 11 U.S.C. § 1522 protective measures in connection with discretionary relief emphasize the need to tailor relief and conditions so as to balance the relief granted to the foreign representative and the interests of those affected by such relief, without unduly favoring one group of creditors over another"*(240). Citing legislative history, Tri-Continental Exchange recognized that: "Congress explained... that the bankruptcy court was being given broad latitude to mold relief to meet specific circumstances"*(241).

Besides creditor protections coming from court action under 11 U.S.C. § 1523(a), the foreign representative is also granted standing to pursue actions under 11 U.S.C. §§ 522, 544, 545, 547, 548, 550, 553 and 724(a). These are powerful mechanisms to protect the interests of creditors, debtors, and other interested parties.

V. Final comments

The number of published Chapter 15 cases has dramatically grown since 2005. Chapter 15 incorporates the Model Law and makes international uniformity its primary goal. Courts have placed high priority on comity, cooperation, and direct communication. They have narrowly interpreted whether a request by a foreign representative is manifestly contrary to United States public policy. As discussed above and frequently discussed by courts, Section 1506 of Title 11 is unique because no other chapter in the Bankruptcy Code requires a provision to protect policies of the United States*(242).

Chapter 15 has replaced the "homegrown" framework of procedural law relating to foreign proceedings under 11 U.S.C. § 304. Chapter 15 is a product of many years of discussion, debate, and dialogue, and provides foreign representatives with a vehicle by which to appear and be heard in United States courts. It has not changed the basic United States approach of dealing with foreign proceedings and the concept of comity. It has provided a more detailed framework and streamlined procedure, and a more effective and user-friendly process for transnational bankruptcy cases. It's important to remember that cross-border insolvencies do not exist in a vacuum. Chapter 15 requires many courts and systems to work together, and implicates a given country's statutory law and common law.

As evident from this update to the original article, case law development continues to shape application of Chapter 15. Courts will surely continue to resolve disputes related to a debtor's COMI and standards for eligibility when interpreting § 109(a). U.S. case law will continue to provide guidance for foreign representatives seeking recognition under Chapter 15 or other relief from other courts.

Generally speaking, courts are applying Chapter 15 in accord with its overarching goals of promoting comity and cooperation with foreign insolvency proceedings. Courts are examining the Model Law, and foreign cases and models in interpreting Chapter 15. Since its enactment in 2005, Chapter 15 has broadened the application and goals of its predecessor, 11 U.S.C. § 304, and has promoted and facilitated transnational insolvency cases, international cooperation, accord, and unity.