In what is often viewed a rudimentary inquiry, recognition of foreign insolvency proceedings under chapter 15 can be a closely scrutinized affair. In In re Creative Finance Ltd. (In Liquidation), 543 B.R. 498 (Bankr. S.D.N.Y. 2016), Judge Robert E. Gerber of the United States Bankruptcy Court for the Southern District of New York (before his retirement in early 2016) dismissed a chapter 15 case after concluding that the debtors’ “Center of Main Interests” (“COMI”) did not change to the British Virgin Islands (“BVI”) — the debtors’ letterbox jurisdiction and where the initial liquidation was filed.
The bankruptcy court found that both the debtors’ and the liquidator’s activities in the BVI were insufficient to warrant recognition under the Bankruptcy Code, either as a main or non-main proceeding. Notably, even though the case was not dismissed on the basis of bad faith, the court nonetheless made specific findings of the debtors’ numerous misconducts that other courts may consider.
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