Ninth Circuit: Reversal on Appeal of Order Denying Chapter 15 Recognition Does Not Retroactively Trigger Automatic Stay

Summary

This article discusses a recent Ninth Circuit case addressing, among other things, whether the automatic stay triggered by recognition of a foreign bankruptcy proceeding under Chapter 15 applies retroactively if a bankruptcy order denying recognition is later reversed on appeal. It is generally recognized that an order of a U.S. bankruptcy court recognizing a debtor's foreign bankruptcy proceeding as a main proceeding under Chapter 15 of the Bankruptcy Code triggers the automatic stay preventing creditor collection efforts against the debtor and its U.S. assets.