Chapter 15 (Bankruptcy) Law and Legal Definition
Chapter 15 of Title 11 in the United States Code is a section of the United States bankruptcy code that deals with jurisdiction. Chapter 15 is a new chapter added to the Bankruptcy Code by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. It is the U.S. domestic adoption of the Model Law on Cross-Border Insolvency promulgated by the United Nations Commission on International Trade Law ("UNCITRAL") in 1997.
The purpose of Chapter 15, and UNCITRAL, the model law on which it is based, is to provide effective mechanisms for dealing with insolvency cases involving debtors, assets, claimants and other parties in interest involving more than one country. This general purpose is realized through five objectives specified in the statute: (1) to promote cooperation between United States courts, interested parties, and the courts and other competent authorities of foreign countries involved in cross-border insolvency cases; (2) to establish greater legal certainty for trade and investment; (3) to provide for the fair and efficient administration of cross-border insolvencies that protects the interests of all creditors and other interested entities, including the debtor; (4) to afford protection and maximization of the value of the debtor's assets; and (5) to facilitate the rescue of financially troubled businesses, thereby protecting investment and preserving employment. 11 U.S.C. § 1501.
Chapter 15 codifies a comprehensive framework through which representatives in corporate insolvency proceedings outside the U.S. can obtain access to United States courts. Chapter 15 became effective on October 17, 2005, replacing Bankruptcy Code Section 304.
