2nd Circuit Vacates Bankruptcy Court’s Refusal to Review Foreign Debtor’s Sale of U.S. Asset

The 2nd U.S. Circuit Court of Appeals held Sept. 26 that a U.S. bankruptcy court was required to conduct a full review of a foreign debtor’s sale of property “within the territorial jurisdiction of the United States.” The court relied on the “plain” language of U.S. Bankruptcy Code § 1520(a)(2), which applies “to a transfer of … property that is within the territorial jurisdiction of the United States to the same extent that the section … would apply to property of … an estate.” In this article, SRZ partner Michael L. Cook discusses the 2nd Circuit’s decision, which stated that the bankruptcy court also “erred when it gave deference to a foreign court’s approval of the asset sale.”