In re Creative Finance Ltd: Chapter 15 Case Dismissed

February 22, 2016

A bankruptcy judge in New York court recently dismissed a case filed under chapter 15 of the U.S. Bankruptcy Code because the debtors did not have their center of main interests or business operations in the jurisdiction where the initial, foreign case was filed, the British Virgin Islands (BVI). In re Creative Finance Ltd. (In Liquidation), No. 14-10358, 2016 WL 156299 (Bankr. S.D.N.Y. Jan. 13, 2016).

The debtors’ operations were in England, Spain, and Dubai. They filed for liquidation in the BVI because that was their place of incorporation. But the liquidator appointed in the case did too little work there to justify recognition under chapter 15. Therefore, Bankruptcy Judge Robert E. Gerber of the Southern District of New York dismissed the case.

This is the latest case in Southern District New York to consider factors required for non-US entities to utilize chapter 15 in cross-border restructuring efforts that originate outside the US.

To continue reading Daniel Lowenthal's article from the February 2016 edition of INSOL International News Update, please click here.