We've blogged about foreign language translations for foreign liquidators of the offshore hedge funds and the need for accurate legal translation services in international insolvency proceedings. The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which was passed in 2005, significantly changed the way foreign insolvency proceedings are handled under U.S. Bankruptcy laws. In fact, BAPCPA created a new chapter specifically focused on dealing with cross-border insolvency proceedings.
A "foreign proceeding" is a "judicial or administrative proceeding in a foreign country ... under a law relating to insolvency or adjustment of debt in which proceeding the [debtor's assets and affairs] are subject to control or supervision by a foreign court for the purpose of reorganization or liquidation." 11 U.S.C. ยง 101(23). A "foreign representative" is the person or entity authorized in the foreign proceeding "to administer the reorganization or liquidation of the debtor's assets or affairs or to act as a representative of such foreign proceeding."
According to Chapter 15 of the U.S. Bankruptcy Code, which is entitled "Ancillary and Other Cross-Border Cases", the purpose is to promote:
Cooperation between the courts and other competent authorities of the US and foreign states involved in cases of cross-border insolvency;
- Greater legal certainty for trade and investment;
- Fair and efficient administration of cross-border insolvencies that protects the interests of all creditors and other interested persons, including the debtor;
- Protection and maximization of the value of the debtor's assets; and
- Facilitation of the rescue of financially troubled businesses, thereby protecting investment and preserving employment.
To accomplish these objectives, Chapter 15 requires any offshore hedge fund seeking foreign insolvency to file a petition for recognition of a foreign proceeding in accordance with Section 1515. When making this petition, the petitioner must file written translations from foreign languages into English of the foreign insolvency decision and supporting documentation.
To read our legal translation blog post "Legal Certified Translation, Professional Translation Services, Legal Translators and the Role of the Foreign Court in Russian Litigation and Arbitration", click here.
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