Fifth Circuit Holds Foreign Representatives May Bring Foreign Law Avoidance Actions Under Chapter 15 of Bankruptcy Code

April 05, 2010
The U.S. Court of Appeals for the Fifth Circuit recently held that foreign representatives appointed in a foreign insolvency proceeding have the authority to bring a foreign law-based avoidance actions in an ancillary bankruptcy proceeding commenced under Chapter 15 of the Bankruptcy Code, reversing the lower court opinions. This update analyzes the ruling, which overrules the apparent understanding that foreign representatives may not pursue avoidance actions in Chapter 15 cases.