Noteholders Beware: Contract Rights and Choice of Law Provisions in an Indenture are Property Rights for Purposes of Commencing a Chapter 15 Case
The Bankruptcy Court for the Southern District of New York recently reaffirmed its view that it takes little to establish “property in the United States,” to qualify a foreign entity for ancillary relief under chapter 15 of the Bankruptcy Code. See 11 U.S.C. § 109(a). Specifically, in In re PT Bakrie Telecom TBK, the Court found that the New York governing law and forum selection clauses found in a trust indenture, constitute a contract right that is enough of a property interest to constitute - “property in the United States” for the purposes of Chapter 15. In re PT Bakrie Telecom TBK, 601 B.R. 707, 715-16 (Bankr. S.D.N.Y. 2019).
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“Noteholders Beware: Contract Rights and Choice of Law Provisions in an Indenture are Property Rights for Purposes of Commencing a Chapter 15 Case,” by Ira L. Herman and Evan J. Zucker was published in the August 2019 edition of the Commercial Law Newsletter, a joint newsletter of the American Bar Association’s Commercial Finance and Uniform Commercial Code Committees. Reprinted with permission.