Foreign Debtor's COMI Shift Dooms Bid For Chapter 15 Recognition

In In re O'Reilly, 598 B.R. 784 (Bankr. W.D. Pa. 2019), the U.S. Bankruptcy Court for the Western District of Pennsylvania denied the petition of a foreign bankruptcy trustee for recognition under chapter 15 of the Bankruptcy Code of a debtor's Bahamian bankruptcy case. Although the Bahamian bankruptcy was otherwise eligible for chapter 15 recognition, the U.S. bankruptcy court held that the debtor's "center of main interests" was no longer in the Bahamas when the Bahamian bankruptcy trustee filed the chapter 15 petition and that the trustee failed to demonstrate that the debtor even had an "establishment" there. In so ruling, the bankruptcy court agreed with the Second and Fifth Circuits that the point in time for determining whether a "foreign proceeding" is "main" or "nonmain" is the chapter 15 petition date, rather than the filing date of the foreign bankruptcy proceeding.