There are a number of different types of bankruptcy, most of which will not be relevant in any given situation. Understanding the different types of bankruptcy will help you determine which one you may qualify for. One lesser-known type of bankruptcy is Chapter 15 Bankruptcy in Wellington FL.
Basic Purpose of Chapter 15 Bankruptcy
This type of bankruptcy was designed with foreign companies in mind. If one of these companies should be filing for bankruptcy in their own country, they may be able to file Chapter 15 Bankruptcy in Wellington FL. The company needs to be able to prove that they’ve filed an insolvency case in another country in order to qualify. Foreign companies may qualify for Chapter 7 or Chapter 11 bankruptcies in some cases.
Types of Chapter 15 Bankruptcy
When a foreign company files for Chapter 15 bankruptcy, the court will determine where most of the company’s assets are located and use this to decide whether it is a “foreign main proceeding”, with most of the companies assets and headquarters located in the country where the original suit was filed, or a “foreign non-main proceeding”, with most of the company’s assets and their headquarters are in a different country.
Effect of Foreign Main Chapter 15 Bankruptcy Proceedings
Once a case is recognized as being a foreign main proceeding, all of that company’s assets in the United States will be under an automatic stay so they won’t be able to be collected by any debtors. Then, the bankruptcy court holding the main proceedings can determine what should happen to these assets as part of the bankruptcy case.
Effect of Foreign Non-Main Chapter 15 Bankruptcy Proceedings
When it’s a foreign non-main Chapter 15 bankruptcy, a stay isn’t automatic. The foreign representative must determine whether this stay is needed to protect the interests of those involved in the suit. All types of relief must be requested by the foreign representative, making this type of bankruptcy potentially less beneficial to the company involved.
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