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4641 Montgomery Avenue, #401
Bethesda, MD
202-834-5623

Cross border insolvencies are by nature extremely complex, even in small cases, due to assets, creditors and business operations including subsidiaries that operate in different countries. For example, assets located in different jurisdictions may be governed by security agreements signed in jurisdictions other than the location of the assets. The legal rules to cope with such complexity often stem from legal traditions that differ so that the national interests of each country can cause conflict. The United States law
approach is moving towards cooperation and coordination among competing courts so that a unified approach is applied to creditors in various countries.

The most common foreign insolvency cases in the United States are called ancillary proceedings. The main proceeding arises in a foreign country, but US bankruptcy court protection is triggered by assets and creditors located in the United States. A foreign representative may file a petition under US bankruptcy law to administer assets located in the US. In many case, there may be US or foreign judgments that creditors may use
to execute on the company assets located in the US. Those assets may need to be protected in a US ancillary bankruptcy proceeding.