COMI Sense Prevails: U.S. Court Finds Canada As COMI In Iovate Case

In the recent decision of Re: Iovate Health Sciences International Inc. et al ("Iovate"), the United States Bankruptcy Court held that an American corporation's centre of main interest ("COMI") was in Canada. This is the third recent decision involving Canadian entities where one corporation in the debtor group was American and the Court determined that its COMI was in Canada. Iovate clarifies when the presumption that an entity's COMI is the jurisdiction of its registered office can be rebutted.

Background Facts

The objective of determining a debtor's COMI is to identify the jurisdiction most closely related to its business to facilitate resolving claims in a single forum.¹ Article 16(3) of the Model Law on Recognition and Enforcement of Insolvency-Related Judgments establishes a rebuttable presumption that a debtor's COMI is the location of its registered office.² However, it does not specify what proof is necessary to overcome this presumption.