Recognition comes first
Chapter 15 bankruptcy does not start a new liquidation or reorganization in the United States. Instead, a foreign representative, the person or entity authorized to administer the foreign case, asks a US bankruptcy court to recognize it. The court considers whether the foreign case is a main proceeding, located where the debtor has its center of main interests, or a nonmain proceeding where it has an establishment. Recognition as a main proceeding brings an automatic stay over the debtor's property in the United States, while relief in a nonmain proceeding is more discretionary. Provisional relief can sometimes be requested before recognition is granted.
Preparing a petition or a response
Representatives should prepare certified copies of the foreign court's opening order and appointment, translations, and evidence about where the debtor is managed and operates. Facts about the debtor's offices, management, and creditor relationships often decide the center of main interests question. US creditors served with notice should review whether the relief sought would affect their lawsuits, collateral, or setoff rights. Courts can condition relief on adequate protection of creditors' interests, and objections may be raised. Keep in mind that the US court applies its own public policy exception, though it is narrow.
What we address early
For a foreign representative, we discuss what relief is needed in the United States, such as stopping a lawsuit, accessing bank accounts, or giving effect to a plan approved abroad. For a US creditor, we look at how recognition would change your ability to collect and whether to participate in the foreign case directly. Coordination with counsel in the home country is often essential, especially in Korean proceedings, and the quality of translations matters because the court relies on the English versions. We also consider timing, because creditors may act against US assets before recognition. The first step is clarifying which side you are on and what is at stake here.
