Chapter 15, Title 11, United States Code

Chapter 15, Title 11, United States Code is a section of the United States bankruptcy code that deals with jurisdiction. Under Chapter 15 a representative of a corporate bankruptcy (insolvency) proceeding outside the U.S. can obtain access to the United States courts. It 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.

It happens with increasing frequency that a bankruptcy proceeding in one country has a connection to assets or information located in another. Because of the involvement of multiple jurisdictions, unique problems arise. In order to solve some of these problems, 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 Section 304 was repealed in 2005 and replaced with Chapter 15, titled "Ancillary and Other Cross Border Cases."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.

Chapter 15 incorporates the Model Law on Cross Border Insolvency drafted by the United Nations Commission on International Trade Law. The law provides solutions to problems which arise in connection with cross-border bankruptcy, allowing US courts to issue subpoenas, orders to turn over assets, the issuance of 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. It also avoids the conflicts which could arise between the jurisdictions involved in two independent bankruptcy proceedings initiated in connection with the same debtor.

Chapter 15 also establishes mechanisms for the cooperation between US and foreign courts and representatives regarding proceedings which involve the same debtor.

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 the US courts will take into account in making this decision is whether the laws of the foreign jurisdiction in connection with which the additional assistance is sought violate the laws or public policy of the United States and if the foreign courts conduct their proceedings according to basic rules of procedural fairness.

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