Ruling Re Non-U.S. Bankruptcy Creates Global Implications

Note: This article contains commentary from firm lawyers in Hong Kong, London, Munich, Paris and the United Arab Emirates.

The Ninth Circuit Bankruptcy Appellate Panel has held that a bankruptcy trustee appointed in a non-U.S. bankruptcy case did not need authority from a U.S. court to take possession and control of a foreign debtor's assets located in the United States, and transfer them.

In In re Iida, 377 B.R. 243, 2007 WL 3086034 (9th Cir. BAP, Sept. 26, 2007), Katsumi Iida and his wife, citizens and residents of Japan, were declared bankrupt under Japanese law in a Japanese court. Junichi Kitahara was appointed the trustee of the Iidas' bankruptcy estate. Many of the Iida's substantial assets were located outside of Japan. These included ownership of controlling equity interests in various Hawaiian corporations that controlled several major Hawaiian resort hotels.