Understanding Chapter 15 (Bankruptcy): A Guide to Cross-Border Insolvency
Definition & Meaning
Chapter 15 of Title 11 in the United States Code is a section of the bankruptcy code that addresses cross-border insolvency. It was introduced by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 and aligns U.S. law with the Model Law on Cross-Border Insolvency developed by the United Nations Commission on International Trade Law (UNCITRAL) in 1997. The main goal of Chapter 15 is to provide a framework for handling insolvency cases that involve multiple countries, ensuring that the interests of debtors and creditors are protected across borders.
Legal Use & context
Chapter 15 is used in legal practice primarily in cases involving international bankruptcy. It allows representatives of foreign debtors to access U.S. courts, facilitating cooperation between U.S. and foreign authorities. This chapter is relevant in various legal areas, particularly in corporate bankruptcy and insolvency law. Users may find it beneficial to utilize legal templates from US Legal Forms to navigate these procedures effectively.
Real-world examples
Here are a couple of examples of abatement:
One example of Chapter 15 in action is when a company based in Canada files for insolvency. If this company has assets or creditors in the United States, it can seek recognition under Chapter 15 to manage its U.S. assets and obligations effectively. This allows the Canadian bankruptcy proceedings to be coordinated with U.S. laws and courts.
(hypothetical example) A business operating in multiple countries faces financial difficulties and files for bankruptcy in its home country. By utilizing Chapter 15, the business can ensure that its U.S. operations are handled in a way that respects both U.S. and foreign laws.
Relevant laws & statutes
Chapter 15 is codified in 11 U.S.C. § 1501 et seq. This statute outlines the procedures and principles governing cross-border insolvency cases in the United States.