Florida Bankruptcy Court Examines Scope of Discovery in Chapter 15 Cases
Chapter 15 of the Bankruptcy Code was enacted more than 20 years ago to provide procedures governing cross-border bankruptcy cases. It is patterned on the 1997 UNCITRAL Model Law on Cross-Border Insolvency (the "Model Law"), which has been enacted in some form by more than 60 countries or territories. Like the Model Law, chapter 15 contemplates "recognition" by a U.S. bankruptcy court of both a "foreign main proceeding" commenced in a country where a foreign debtor has its "center of main interests" (COMI), and "foreign nonmain proceedings" in countries where the debtor maintains an "establishment."
Once a debtor's accredited "foreign representative" has satisfied the Bankruptcy Code's requirements for chapter 15 recognition, chapter 15 authorizes a U.S. bankruptcy court to grant a wide variety of relief designed to assist the foreign representative and the foreign court presiding over the debtor's bankruptcy proceeding in preserving and administering the debtor's assets located in the United States.
As demonstrated by a decision handed down by the U.S. Bankruptcy Court for the Southern District of Florida, one important form of chapter 15 relief is discovery regarding the foreign debtor's U.S. assets (including potential causes of action, such as avoidance claims). In In re Banco Master, S.A., No. 25-24568-SMG, 2026 WL 931729 (Bankr. S.D. Fla. Apr. 6, 2026), the court granted in part and denied in part post-recognition motions filed by a controlling shareholder and former administrator of the foreign debtors seeking to bar or limit discovery sought by the debtors' foreign representative concerning allegedly voidable transfers involving the debtors' U.S. real property.
According to the court: (i) although chapter 15 includes its own discovery provisions among the relief that may be granted to a foreign representative, the expansive discovery available in cases under other chapters of the Bankruptcy Code is also available in chapter 15 cases; (ii) the discovery sought by the foreign representative was permissible; (iii) discovery regarding matters that were the subject of a pending adversary proceeding had to be undertaken under the more restrictive rules applicable to such proceedings; and (iv) a discovery request would be barred to the extent that it sought production of documents or testimony from a subpoenaed entity that exceeded the geographic limitations specified in such rules.
Discovery in Bankruptcy
Rule 2004 of the Federal Rules of Bankruptcy Procedure (each, a "Bankruptcy Rule") provides a broad-ranging discovery mechanism in bankruptcy cases. It states that "[o]n motion of any party in interest, the court may order the examination of any entity." Such an examination "may relate only to the acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor's estate, or to the debtor's right to a discharge." In addition, in a non-railroad "reorganization case under chapter 11" (among other cases), the examination "may also relate to the operation of any business and the desirability of its continuance, the source of any money or property acquired or to be acquired by the debtor for purposes of consummating a plan and the consideration given or offered therefor, and any other matter relevant to the case or to the formulation of a plan."
Discovery may also be sought in "adversary proceedings" (see Bankruptcy Rule 7001) or "contested matters" (see Bankruptcy Rule 9014) commenced during a bankruptcy case, and in certain other contexts, such as contested involuntary bankruptcy or chapter 15 petitions. Such discovery is governed by Bankruptcy Rules 7026–7037 and 9016, which incorporate many of the discovery procedures under the Federal Rules of Civil Procedure ("Fed. R. Civ. P") that apply to other kinds of federal litigation. These rules include specific procedures governing disclosure, witnesses, subpoenas, depositions, interrogatories, document production, physical and mental examinations, requests for admission, and other discovery-related matters.
Discovery in Chapter 15 Cases
In a chapter 15 case, section 1521(a) of the Bankruptcy Code provides that, upon recognition by a U.S. bankruptcy court of a foreign main or foreign nonmain proceeding, the court may, "at the request of the [debtor's] foreign representative," grant any appropriate relief, including "providing for the examination of witnesses, the taking of evidence or the delivery of information concerning the debtor's assets, affairs, rights, obligations or liabilities." 11 U.S.C. § 1521(a)(4). See In re Millennium Glob. Emerging Credit Master Fund Ltd., 471 B.R. 342, 346 (Bankr. S.D.N.Y. 2012) (discovery under section 1521(a)(4) "enables a Foreign Representative to take broad discovery concerning the property and affairs of a [foreign] debtor").
Where discovery is requested, however, section 1522 provides that the court may grant such relief "only if the interests of the creditors and other interested entities, including the debtor, are sufficiently protected." See In re AJW Offshore, Ltd., 488 B.R. 551, 561 (Bankr. E.D.N.Y. 2013) (discovery under section 1521(a)(4) "will only be permitted by motion on notice with an opportunity for hearing to the adverse parties and by making examination and production of documents…, with any discovery to be allowed to be subject to conditions imposed in accordance with §1522").
Discovery under section 1521(a)(4) need not "concern the preservation or recovery of property in the United States" because chapter 15 "is not an independent in rem proceeding but an ancillary proceeding designed to assist a foreign representative in administering the foreign estate." Millennium, 471 B.R. at 347; In re Fairfield Sentry Ltd. Lit., 458 B.R. 665, 679 n.5 (S.D.N.Y. 2011) (stating that section 1521(a)(4) "allows for discovery in the United States whether or not a debtor has assets here").
Chapter 15 discovery is not limited to documents located in the United States, but also extends to documents in the possession, custody, or control of a party, including documents held by a party's attorneys or agents. See In re Markus, 607 B.R. 379, 389 (Bankr. S.D.N.Y. 2019), aff'd in part, vacated in part and remanded, 615 B.R. 679 (S.D.N.Y. 2020). A subpoena issued under Fed. R. Civ. P. 45, which is made applicable to all bankruptcy cases by Bankruptcy Rule 9016, requires the production of documents responsive to the subpoena, wherever the documents may be located. Sergeeva v. Tripleton Int'l Ltd., 834 F.3d 1194, 1200 (11th Cir. 2016); In re Hulley Enters., 358 F. Supp. 3d 331, 345 (S.D.N.Y. 2019); Marcus, 607 B.R. at 391.
Most of the ordinary discovery mechanisms applying to adversary proceedings or contested matters expressly apply to contested recognition petitions in chapter 15 cases (see Bankruptcy Rule 1018). In addition, outside contested recognition proceedings, many courts have concluded that broad discovery under Bankruptcy Rule 2004 is available in chapter 15 cases as a form of "additional assistance" that can be granted in the court's discretion under section 1507(a) of the Bankruptcy Code. That section provides that, upon chapter 15 recognition of a main or nonmain proceeding, the bankruptcy court may provide "additional assistance" to a foreign representative "under [the Bankruptcy Code] or under other laws of the United States." See Millennium, 471 B.R. at 346–47; accord In re Platinum Partners Value Arbitrage Fund L.P., 583 B.R. 803, 810 (Bankr. S.D.N.Y. 2018) (noting that "[r]elief sought pursuant to Bankruptcy Rule 2004 may also be available pursuant to sections 1507, 1521(a)(4) or 1521(a)(7)"); In re Petroforte Brasileiro de Petroleo Ltda., 542 B.R. 899, 911 (Bankr. S.D. Fla. 2015) (concluding that the scope of chapter 15 discovery was not solely controlled by section 1521; Bankruptcy Rule 2004 is also applicable); see also In re Golden Sphinx Ltd., 2023 WL 2823391, at *3 (Bankr. C.D. Cal. March 31, 2023) (holding that, although discovery regarding a foreign debtor's assets is best pursued in the foreign bankruptcy proceeding, rather than in a chapter 15 case, Bankruptcy Rule 2004 applies in chapter 15 cases and that, under appropriate circumstances, a party other than the debtor's foreign representative may obtain discovery in a chapter 15 case); In re Comair Ltd., 2021 WL 5312988, at *9 and n.19 (Bankr. S.D.N.Y. Nov. 14, 2021) (citing decisions in which the courts have concluded that Bankruptcy Rule 2004 applies in chapter 15 cases, but noting that, "[s]ince the Foreign Representative can obtain the discovery he seeks pursuant to section 1521(a)(4), the discussion of the application of Rule 2004 in chapter 15 cases is academic"), appeal dismissed, 2023 WL 171892 (S.D.N.Y. Jan. 12, 2023). But see In re Sibaham Ltd., 2020 WL 2731870, at *4 (Bankr. W.D.N.C. May 4, 2020) ("Discovery in a Chapter 15 foreign main proceeding falls under § 1521(a)(4)" and "Chapter 15 discovery, like all discretionary relief under § 1521, is one-sided, as it can only be granted 'at the request of the foreign representative'").
As the court in Millennium noted, "one of the main purposes of chapter 15 is to assist a foreign representative in the administration of the foreign estate, … which would militate in favor of granting a foreign representative broad discovery rights using the full scope of Rule 2004." Millennium, 471 B.R. at 347.
Discovery in chapter 15 cases has also been sought by foreign representatives under section 542(e) of the Bankruptcy Code, which provides that, "[s]ubject to any applicable privilege, after notice and a hearing, the court may order an attorney, accountant, or other person that holds recorded information, including books, documents, records, and papers, relating to the debtor's property or financial affairs, to turn over or disclose such recorded information to the trustee." 11 U.S.C. § 542(e); see, e.g., AJW, 488 B.R. at 564.
Discovery in connection with foreign court proceedings is also authorized by 28 U.S.C. § 1782(a), which provides in relevant part that:
The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court.
Courts are uncertain as to whether chapter 15 recognition is a necessary "ticket to entry" to U.S. courts to seek discovery for use in a foreign bankruptcy court under 28 U.S.C. § 1782(a). See In re Soundview Elite, Ltd., 503 B.R. 571, 592 n.56, 594 (Bankr. S.D.N.Y. 2014) (discussing the interplay between chapter 15 and 28 U.S.C. § 1782 and noting uncertainty among the courts as to whether chapter 15 recognition is necessary to seek discovery under 28 U.S.C. § 1782) (citing and discussing In re Glitnir Banki HF, 2011 WL 3652764 (Bankr. S.D.N.Y. Aug. 19, 2011); In re Toft, 453 B.R. 186 (Bankr. S.D.N.Y. 2011)).
Banco Master
Banco Master, S.A. ("BM") was a Brazilian financial institution and investment brokerage firm. Daniel Vorcaro ("Vorcaro") was a controlling shareholder and former administrator of BM. In November 2025, following a severe liquidity crisis, the Central Bank of Brazil (the "CBB") directed that BM and its affiliates (collectively, the "debtors") be liquidated in an extrajudicial liquidation proceeding (the "Brazilian proceeding").
On December 10, 2025, the debtors' extrajudicial liquidator—acting as their foreign representative (the "FR")—filed a petition in the U.S. Bankruptcy Court for the Southern District of Florida (the "bankruptcy court") seeking recognition of the Brazilian proceeding under chapter 15 of the Bankruptcy Code as a foreign main proceeding. Over Vorcaro's sole objection, the bankruptcy court granted the petition on January 8, 2026. In its recognition order, the court authorized the FR under section 1521(a)(4) of the Bankruptcy Code, Bankruptcy Rule 2004, and applicable local rules to examine witnesses and seek discovery of information regarding the debtors' assets, affairs, rights, obligations, or liabilities.
In January and February 2026, the FR issued 28 subpoenas to entities seeking discovery under Bankruptcy Rule 2004. Those entities included art dealers and luxury retailers with respect to the debtors and 16 other entities, including Vorcaro, all of which were subject to automatic asset freeze orders issued by the CBB in connection with the Brazilian proceeding. Vorcaro objected to the subpoenas, arguing that they were contrary to the purpose of chapter 15 and overly broad under Bankruptcy Rule 2004, and should be restricted to exclude inquiry into his personal affairs. On behalf of two other subpoenaed parties, Vorcaro also claimed that the subpoenas violated Fed. R. Civ. P. 45(c)(2)(A)—made applicable in bankruptcy cases by Bankruptcy Rule 9016—because they commanded the production of documents or other materials at a location more than 100 miles from the subpoenaed parties' residences. Vorcaro accordingly filed motions for protective orders quashing or restricting the scope of the subpoenas.
Shortly before the hearing on Vorcaro's motions for protective orders, the FR filed an adversary proceeding in the bankruptcy court against Sozo Real Estate, Inc. (one of the subpoenaed parties), Vorcaro's father, and his sister, and asserted claims for constructive trust, equitable lien, and avoidance of certain transactions under Brazilian law related to the purchase of Florida real estate. Vorcaro also contended that discovery was precluded under the "pending proceeding rule"—whereby, once an adversary proceeding or contested matter is commenced in a bankruptcy court, discovery must be made under the discovery rules set forth in Part VII of the Bankruptcy Rules (Bankruptcy Rules 7026 et seq.) rather than Bankruptcy Rule 2004.
The Bankruptcy Court's Ruling
The bankruptcy court granted in part and denied in part Vorcaro's motions for protective orders.
Initially, Chief U.S. Bankruptcy Judge Scott M. Grossman declined to rule on the FR's argument that Vorcaro lacked standing to object to subpoenas that were directed at other parties. Instead, the court found it unnecessary to do so to the extent that it denied the protective order motions, and because the court granted protective relief on its own volition based on due process concerns. Banco Master, 2026 WL 931729, at *3.
Judge Grossman explained that the scope of discovery under Bankruptcy Rule 2004 "is unfettered and broad," and that the availability of such extensive discovery "is an important tool in implementing the statutory purpose of the [Model Law]." He further noted that, as Judge Tjoflat explained in his concurrence in In re Al Zawawi, 97 F.4th 1244, 1257–77 (11th Cir. 2024), the Model Law's cooperation mechanisms were designed, among other things, to confront the increasing problem of fraud committed by insolvent debtors in the form of concealing assets or transferring them beyond the reach of local creditors to foreign jurisdictions. Discovery, Judge Grossman emphasized, is accordingly an essential element of an objective shared by the Model Law and chapter 15.
Addressing the discovery sought by the FR, the bankruptcy court noted that the requests for information from the subpoenaed entities regarding the debtors' U.S. assets and transactions were predicated on Brazilian law governing extrajudicial liquidation proceedings, including provisions freezing the assets of various insider and non-insider entities, and "are consistent with the basic inquiries permitted under chapter 15 and [Bankruptcy] Rule 2004." Judge Grossman concluded that the asset freeze "provisions of Brazilian law—together with the provisions and purposes of chapter 15—justify the discovery sought by the [FR]." Id. at *4.
According to the bankruptcy court, Brazil's statutory framework regarding freezing the assets of entities "whose assets may be intertwined with, derived from or otherwise related to" the debtors' assets or liabilities "aligns with the objectives of chapter 15, which include protecting the interests of creditors and other interested parties and maximizing the value of the debtors' assets as well as addressing the risk that assets may be concealed or transferred beyond the reach of creditors." Id. Judge Grossman therefore held that the discovery sought by the FR was within the scope of discovery authorized by both section 1521(a)(4) and Bankruptcy Rule 2004.
In so ruling, he rejected Vorcaro's argument that, prior to obtaining discovery, the FR must produce some evidence that the subpoenaed parties dissipated or diverted the debtors' assets. He wrote that "neither the text nor the scope of [Bankruptcy] Rule 2004 supports this position," explaining that "[n]othing in [Bankruptcy] Rule 2004 limits the examination to confirming already-established conduct." Instead, Judge Grossman emphasized, Bankruptcy Rule 2004 "permits a thorough investigation that may lead to the discovery of assets, financial information, or other matters relevant to the administration of the estate, including 'whether wrongdoing has occurred.'" Id. (citation omitted).
The bankruptcy court also held that Vorcaro failed to demonstrate "good cause" for a protective order, explaining that generalized assertions of privacy rights under Florida law and Brazilian banking secrecy laws were inadequate. Id. at *5.
Despite determining that the discovery sought by the FR was authorized by section 1521(a)(4) and Bankruptcy Rule 2004, the bankruptcy court explained that the "pending proceeding rule" limiting broad Bankruptcy Rule 2004 discovery applied in this instance because the FR commenced an adversary proceeding against Sozo Real Estate (one of the subpoenaed parties) and Vorcaro's family members after the subpoenas were issued—meaning that, instead of Bankruptcy Rule 2004, the more restrictive Bankruptcy Rules governing adversary proceedings (Bankruptcy Rules 7026 et seq.) should apply. Judge Grossman explained that Bankruptcy Rule 2004 "fishing expeditions" should not be utilized as a tactic to circumvent the safeguards provided by the rules normally applied to adversary proceedings in bankruptcy. Id.
However, the bankruptcy court noted, the mere pendency of an adversary proceeding does not halt all discovery under Bankruptcy Rule 2004. Instead, discovery unrelated to the pending proceeding could proceed under Bankruptcy Rule 2004. Because four of the FR's subpoenas sought discovery with respect to the Florida real property that was the focus of the adversary complaint, the court held that the scope of that discovery was governed by Bankruptcy Rules 7026–37. Discovery under the remaining 24 subpoenas, Judge Grossman explained, was properly governed by Bankruptcy Rule 2004, and Vorcaro's motion for a protective order with respect to those subpoenas was denied. Id. at **6–7.
Finally, the bankruptcy court granted a protective order covering one of the subpoenaed parties—the Bank of New York Mellon—because the subpoena commanded production at a location outside of the 100-mile limitation specified in Fed. R. Civ. P. 45(c)(2)(A).
Outlook
Although Banco Master does not break any new ground, its exposition of the rules and restrictions regarding discovery available in a chapter 15 case is instructive.
Key takeaways from the ruling include: (i) discovery is available in a chapter 15 case to assist a foreign representative in investigating the extent of a foreign debtor's U.S. assets, including potential claims against entities that reside, do business, or have assets in the United States; (ii) although chapter 15 has its own discovery mechanism in section 1521(a)(4) as a form of discretionary relief that may be granted by a U.S. bankruptcy court after recognition of a foreign bankruptcy proceeding, discovery may also be obtained under Bankruptcy Rule 2004, which permits broad discovery in cases under all chapters of the Bankruptcy Code and has sometimes been likened to a "fishing expedition"; and (iii) if discovery is sought in an adversary proceeding, the more restrictive discovery rules applicable to such proceedings apply, in accordance with the "pending proceeding rule" that ensures discovery proceeds within the structured framework of rules and procedures applicable to adversary proceedings.
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