This browser is not actively supported anymore. For the best passle experience, we strongly recommend you upgrade your browser.
Welcome to Reed Smith's viewpoints — timely commentary from our lawyers on topics relevant to your business and wider industry. Browse to see the latest news and subscribe to receive updates on topics that matter to you, directly to your mailbox.
| 1 minute read

A Foreign Debtor's "Center of Main Interests": Debating D-Day

One concept—“center of main interests,” or COMI for short, one of the more significant elements borrowed from international law and incorporated into Chapter 15 of the Bankruptcy Code—sits at the heart of the latter, enacted in 2005 as the latest U.S. legislative attempt to handle cross-border insolvencies and international restructurings.

In spite of this notion’s importance, however, bankruptcy and appellate federal courts have long divided over a thresholder issue: as of which date should a foreign debtor’s COMI be determined?

An apparent majority insists that only one day makes sense, legally, practically, even logistically: the one on which a petition for recognition of the foreign debtor’s already commenced non-U.S. insolvency was filed in a U.S. bankruptcy court.

Regarding this as happenstance, a substantial minority instead favors the date on which the relevant debtor’s foreign insolvency proceeding actually began, whenever and wherever that happened to be.

And, of course, a handful refuse to commit, instead preferring to make their pick on a case-by-case basis.

In an article entitled “Chapter 15’s Comi-Undrum: The Temporality of a Foreign Debtor’s True Nucleus,” Amir Shachmurove analyzed the merits and demerits of each side in light of Chapter 15's prose, purpose, and past.

Although published in the November 2021 issue of the Norton Bankruptcy Law Adviser, this piece finally made its way to the author’s page at SSRN on March 6, 2023.


"[T]o establish a date prior to the Chapter 15 filing as the relevant date for settling upon a debtor’s COMI amounts to 'bad policy,' likely to prompt 'a meandering and neverending inquiry into the debtor’s past interests [that] could lead to a denial of recognition' inimical to Chapter 15’s plain and unambiguous objectives." "'[T]he commencement date of the insolvency proceeding for which recognition is sought' presents an easily verifiable point of rehabilitative genesis, one readily fixed without torturing 'the plain words of the statute.'" "Analytically, '[t]he crucial party in a Chapter 15 proceeding is the ‘foreign representative’ of the debtor."


international bankruptcy, chapter 15, comi, petitionforrecognition, foreign debtor, restructuring & insolvency, international insolvency, universalism, localism, international law, territorialism, restructuring and insolvency