Trend Watch : Determining COMI In US Chapter 15 Proceedings

A US Bankruptcy Court's recent decision provides important insights for Canadian debtor companies that are involved in cross-border restructurings and are seeking recognition of Canadian insolvency proceedings in the United States.

In Re: Iovate Health Sciences International Inc., et al., a Chapter 15 proceeding involving the Ontario-based Iovate group of companies, Chief Judge Martin Glenn of the US Bankruptcy Court for the Southern District of New York issued reasons to address the "recurrent issue" of when an entity may rebut the presumption that its "center of main interests" (referred to as COMI) is in the jurisdiction of its registered office.¹ Those reasons were issued in support of provisional relief that the Iovate group sought to, among other things, temporarily preserve its assets in the United States while the Canadian insolvency proceedings continue. The formal recognition hearing is pending as of the date of this article.