Panel:“ Chapter 15 and Beyond: Recent Developments in Complex Cross-Border Cases”
Summary by Nicole Raca Bromberg- NextGen Class XV
The restructuring world is a chessboard, as capital structures move across borders in search of the most effective venue to solve their debt problems. This is how the panel kicked off its discussions, framed by the following leading question: Is forum shopping in cross-border restructuring necessarily a problem, or can it reflect healthy competition among legal systems? The discussion was moderated by Dan Moss( United States) and featured Lord David Richards( former Justice of the Supreme Court, United Kingdom), Judge Anna Elisabeth de Vos( judge at the District Court of Amsterdam, The Netherlands), Luciana Celidonio( Brazil), and Smitha Menon( Singapore).
40
Multinational companies are no longer limited to restructuring in their home countries. They may choose among increasingly sophisticated regimes and seek recognition elsewhere, including in the United States under Chapter 15. The panel examined whether that freedom promotes better outcomes or creates opportunistic forum selection through four different issues:( i) the effect of forum competition;( ii) third-party releases;( iii) the use of a“ Super NewCo” to access a preferred forum; and( iv) the standards courts apply when recognizing a foreign restructuring.
The panel first addressed what makes competition among restructuring forums positive and appropriate. On one hand, Chapter 11 remains powerful, but it can be expensive, lengthy, and
disruptive. On the other hand, English schemes and restructuring plans, Singapore schemes, and the Dutch WHOA may offer faster or more targeted alternatives. Choosing among these systems is not inherently abusive, as a company may legitimately select the forum that best preserves value, particularly where creditors support that choice and where there are due process safeguards. The dividing line is whether the selected forum solves a genuine commercial problem or merely avoids protections creditors would receive elsewhere.
The panel then turned to third-party releases, a topic that has continued to shake the international insolvency community after the United States Supreme Court’ s Purdue Pharma decision. These provisions protect non-debtors( such as affiliates, guarantors, directors, or shareholders) from claims connected to the restructuring. Purdue sharply limited nonconsensual releases in Chapter 11, but it did not necessarily prevent U. S. courts from recognizing foreign plans that contain them. The panelists noted that courts have continued recognizing foreign releases under Chapter 15, provided the debtor comes prepared with evidence that the releases were a legitimate, consented-to part of the foreign process. The approaches abroad differ. English and Singapore courts focus on whether the release is necessary and connected to the restructuring bargain. Brazil is more consent-oriented, binding only creditors who voted in favor or stayed silent, as there is a provision in the local bankruptcy law that excludes non-debtor guarantors from the release. In the Netherlands, third-party releases may be included in a plan, but their enforceability remains unsettled. Chapter 15 is therefore
40