Vol 16 (2019) - Issue 2

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In re B.C.I. Finances PTY Limited: Further Insights on the Second Circuit Requirement of Having Property in the US to Obtain Recognition of a Foreign Proceeding in Chapter 15

Synopsis

In 2013, the Second Circuit clarified that foreign debtors seeking recognition of their insolvency proceeding through chapter 15 of the Bankruptcy Code in New York or other courts within the Second Circuit must show a domicile, a place of business, or property in the United States ('US') to have its foreign proceeding recognised.2 Since then, several decisions have proved that this requirement has no 'minimum' requirement – even a nominal amount of funds in a US bank account may satisfy it. Indeed, in In re B.C.I. Fins. Pty Ltd. (In Liquidation),3 the United States Bankruptcy Court for the Southern District of New York (the 'Court') held that a $1,250.00 retainer account for the foreign liquidators’ US counsel alone satisfied the property requirement embedded in section 109 of the Bankruptcy Court. Additionally, the Court also held that certain fiduciary duty claims against directors were located in the US, where the directors resided.