Twice in thirty years, the “mad scramble to the U.S. Courts for immediate attachments …” seemingly characteristic of cross-border cases prompted a legislative fix to this nation’s federal restructuring system, with territorialism giving way to progressively more pronounced internationalism. Prior to 1978, when U.S. courts considered whether to defer to a foreign insolvency, they overwhelmingly favored a territorial analysis that stressed the rights of U.S. creditors. When it enacted the Bankruptcy Code (“Code”) in 1978, however, Congress added two clauses (§ 303(b)(4) and § 305(b)) and two new sections (§§ 304 and 306) in its first formal bid to deal with cross-border bankruptcies, driven in part by the drip of cross-border insolvency cases that followed the conclusion of three high-profile cases starring foreign banks with U.S. assets deemed insolvent abroad. Into only one of these provisions (§ 304) did it deposit the entirety of its regulation of a foreign representative’s right to open an ancillary case so as “to help further the efficiency of foreign insolvency proceedings involving worldwide assets.” Yet, even though this section represented a palpable shift away from territorialism and toward a modified universalism built on principles of international comity and respect for the judgments and laws of other nations, its “shopping list of factors for the court to consider in determining what, if any, relief to give in deference to the [ancillary] foreign proceeding” undercut any such tendency, and nowhere in the Code was allowance made for the coordination of full-blown proceedings pending in both the United States and another country. In the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”), Congress swapped this central provision, along with all its attendant limitations, for Chapter 15; with few exceptions, this chapter is a substantively unaltered copy of the Model Law on Cross-Border Insolvency (“Model Law”) released by the United Nations Commission on International Trade Law (“UNCITRAL”) in 1997. By deliberate design, one concept—that of a foreign debtor’s “center of main interests” (“COMI”), “arguably the most significant element borrowed from international law and incorporated into [C]hapter 15”—now sits at the heart of the U.S.’s latest cross-border insolvency regime. Enveloped in much ambiguity globally and domestically, this term has catalyzed the kind of chaos that Chapter 15’s supporters and architects angled to minimize, if not wholly avert. Indeed, throughout this chapter’s nearly fifteen years of existence, this nation’s courts have sharply disagreed about the appropriate date for making this fundamental, threshold determination. In this long-running dispute, two sides have formed; naturally, each points to Chapter 15’s plain text and intimate ambitions. Today, a definite majority of courts has coalesced around the petition date, even as an eloquent minority vociferously differs, and an even smaller contingent gropes for compromise. For now, because neither’s victory is assured outside of two admittedly influential circuits, and Chapter 15 sweeps broadly, cognizance of these dueling strains is invaluable for court and counsel alike. While this interpretive entropy will likely last, a route through it may then be glimpsed, one limned in the last substantive part of this article
