The Scorecard so Far: Emerging Issues in Cross-Border Insolvencies Under Chapter 15 of the U.S. Bankruptcy Code

O'Flynn, Megan R | January 1, 2012

Chapter 15 of the U.S. Bankruptcy Code was modeled after the Model Law on Cross-Border Insolvency, drafted by the United Nations Commission on International Trade and Law (UNCITRAL) in 1997. Despite the relatively small number of cases commenced in U.S. Courts under Chapter 15 since its adoption, no other section of the current Bankruptcy Code has broader implications for international business transactions and global foreign business relations than the provisions of Chapter 15. Moreover, since the United States has long been an innovator at the forefront of international insolvency law, interpretation of key provisions of the Chapter and related UNCITRAL Model Law complements by U.S. courts could provide meaningful guidance for foreign policymakers and courts as well as foreign and domestic businesses operating globally. This Comment provides a brief history of international insolvency law, focusing on the development of the UNCITRAL Model Law and the eventual adoption of Chapter 15 into U.S. Bankruptcy Code and its impacts on substantive U.S. law. It then examines two major emerging legal issues facing U.S courts since Chapter 15’s adoption, namely, the development of the “Center of Main Interests” analysis and the “Public Policy Exception,” and analyzes these issues within the framework of the stated goals of the Chapter as defined in the Code and based on the Model Law.