Note: This article originally ran in The Review of Banking & Financial Services Journal, Vol. 42 No. 1.
This article examines the emerging trend of U.S.-based companies with Canadian ties initiating primary insolvency proceedings in Canada and seeking recognition in the United States under Chapter 15 of the U.S. Bankruptcy Code. As described herein, this two-step strategy enables debtors to take advantage of the flexibility and efficiency of Canadian restructuring regimes, while securing key U.S. bankruptcy protections.
A Strategic Shift in Cross-Border Insolvency
Recently, certain U.S.-based companies with Canadian ties have opted to file their primary insolvency proceedings in Canada and then seek recognition in the United States under…