Chapter 15, Title 11, United States Code
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Chapter 15, Title 11, United States Code is a section of the United States bankruptcy code that deals with jurisdiction.
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[edit] Jurisdiction issues
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 US Bankruptcy Code in 1978. Section 304 has recently been repealed and replaced with Chapter 15, titled "Ancillary and Other Cross Border Cases".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.
[edit] UNCITL
Chapter 15 incorporates the Model Law on Cross Border Insolvency drafted by the United Nations Commission on International Trade and 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.
[edit] Discretionary assistance
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.
Among other factors the US courts will consider how the foreign jurisdiction treats creditors, whether it prevents the fraudulent transfer of debtor's property, if US creditors are protected against prejudice in the processing of their claims there, and the manner in which assets are distributed.
The court may conduct an evidentiary hearing, including the hearing of expert testimony, to determine whether the proceedings of the foreign forum are sufficiently just to grant the assistance requested.
