Debtors frequently transfer assets to foreign transferees. Recovering those assets in bankruptcy as a preference, fraudulent transfer, or unauthorized post-petition transfer, might require convincing the Bankruptcy Court that applicable sections of the Bankruptcy Code apply extraterritorially.
Opinions among the circuits are far from uniform, and recent cases have only widened the disparate views. Convincing a Bankruptcy Court to assert jurisdiction over an avoidance claim involving a foreign transferee may hinge on understanding the different perspectives that courts have been applying to the concept of “extraterritoriality.”
In the complimentary CLE-accredited webinar “The Ins and Outs of Extraterritoriality in Bankruptcy Cases,” SulmeyerKupetz Senior Counsel Dave Richardson discussed extraterritorial application of the Bankruptcy Code’s avoidance statutes, as well as:
- What constitutes an extraterritorial issue, as opposed to one of personal jurisdiction.
- The varying tests that courts apply to determine if the avoidance statute can be applied extraterritoriality.
- The practical realities of collection after extraterritorial application of an avoidance statute.
- Whether the doctrine of Comity is likely to prevent the Bankruptcy Court from hearing an avoidance claim against a foreign defendant.