Cross-border insolvency practitioners the world over may know that chapter 15 of the US Bankruptcy Code allows a foreign representative to seek recognition of a non-US insolvency proceeding and, upon recognition, to benefit from an automatic stay of execution against the debtor’s assets “within the territorial jurisdiction of the United States.”
However, some insolvency practitioners may not realise the full scope of additional tools available not only to protect the debtor’s identifiable US assets - but also to trace and recover additional assets in the United States through the investigative powers of 11 USC. § 1521(a)(4). Several recent cases highlight the potential value of obtaining broad discovery powers in the United States through chapter 15 recognition.