New York Bankruptcy Court Rejects Challenge to Barnet Rule Permitting Foreign Debtors to Obtain Chapter 15 Recognition With Only Minimal U.S. Assets

As chapter 15 of the Bankruptcy Code reaches its 20th anniversary, the volume of chapter 15 cases has increased significantly, and chapter 15 jurisprudence has rapidly matured. Even so, certain important issues are still being ironed out in the courts. One of those is whether, to be eligible for chapter 15 relief, a foreign debtor must satisfy the requirement in the Bankruptcy Code applicable to cases under other chapters that the debtor reside, or have a place of business or property, in the United States. 

In 2013, the U.S. Court of Appeals for the Second Circuit staked out its position on this issue in Drawbridge Special Opportunities Fund LP v. Barnet (In re Barnet), 737 F.3d 238 (2d Cir. 2013), ruling that the provision of the Bankruptcy Code requiring U.S. residency, assets, or a place of business applies in chapter 15 cases as well as cases filed under other chapters. In 2024, the U.S. Court of Appeals for the Eleventh Circuit ruled to the contrary in In re Al Zawawi, 97 F.4th 1244 (11th Cir. 2024), thereby creating a rift in the circuits on the issue.

Guided by Barnet, bankruptcy courts in the Second Circuit have uniformly toed the line established by Barnet and refined its rationale to mean that an otherwise qualifying foreign debtor need only have a minimal amount of U.S. property—such as a U.S. bank account—to be eligible for chapter 15 relief. One of the latest to do so was the U.S. Bankruptcy Court for the Southern District of New York. In In re B.C.I. Finances Pty Limited, 671 B.R. 669 (Bankr. S.D.N.Y. 2025), the court rejected a challenge to the Barnet approach, ruling that an attorney retainer account in a U.S. bank made a foreign debtor eligible for chapter 15 relief. According to the court, easy access to chapter 15 is consistent with both the plain language of the Bankruptcy Code and the purposes and policies underpinning chapter 15. 

Procedures, Recognition, Relief, and Eligibility Under Chapter 15

Chapter 15 was enacted in 2005 to govern cross-border bankruptcy and insolvency proceedings. It is patterned on the 1997 UNCITRAL Model Law on Cross-Border Insolvency (the "Model Law"), which has been enacted in some form by nearly 60 nations or territories.

Section 1501(a) of the Bankruptcy Code states that the purpose of chapter 15 is to "incorporate the [Model Law] so as to provide effective mechanisms for dealing with cases of cross-border insolvency with the objectives of," among other things, cooperation between U.S. and foreign courts, greater legal certainty for trade and investment, fair and efficient administration of cross-border cases to protect the interests of all stakeholders, protection and maximization of the value of a debtor's assets, and the rehabilitation of financially troubled businesses.

Section 1508 requires U.S. courts interpreting chapter 15 to "consider its international origin, and the need to promote an application of this chapter that is consistent with the application of similar statutes adopted by foreign jurisdictions." 

Chapter 15 replaced section 304 of the Bankruptcy Code. Section 304 allowed an accredited representative of a debtor in a foreign bankruptcy proceeding to commence a limited "ancillary" bankruptcy case in the United States for the purpose of enjoining actions against the foreign debtor or its assets located in the United States or, in some cases, repatriating such assets or their proceeds abroad for administration in the debtor's foreign bankruptcy. 

Under section 1515 of the Bankruptcy Code, the "foreign representative" of a foreign "debtor" may file a petition in a U.S. bankruptcy court seeking "recognition" of a "foreign proceeding." 

Section 1502 provides that "for the purposes of [chapter 15] … 'debtor' means an entity that is the subject of a foreign proceeding." 

However, section 101 of the Bankruptcy Code also includes a definition of the term "debtor," and section 109 limits the entities that can qualify as a debtor. Section 101(13) provides that "debtor" means "person or municipality concerning which a case under this title has been commenced." Section 109(a) states that, "[n]otwithstanding any other provision of this section, only a person that resides or has a domicile, a place of business, or property in the United States, or a municipality, may be a debtor under this title." 11 U.S.C. § 109(a) (emphasis added). Section 103(a) provides that "this chapter"—i.e., chapter 1, including section 109(a)—"appl[ies] in a case under chapter 15." 

Section 101(24) defines "foreign representative" as "a person or body, including a person or body appointed on an interim basis, authorized in a foreign proceeding to administer the reorganization or the liquidation of the debtor's assets or affairs or to act as a representative of such foreign proceeding." 

"Foreign proceeding" is defined in section 101(23) of the Bankruptcy Code as: 

[A] collective judicial or administrative proceeding in a foreign country, including an interim proceeding, under a law relating to insolvency or adjustment of debt in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganization or liquidation.

11 U.S.C. § 101(23). More than one bankruptcy or insolvency proceeding may be pending with respect to the same foreign debtor in different countries. Chapter 15 therefore contemplates recognition in the United States of both a foreign "main" proceeding—a case pending in the country where the debtor's center of main interests ("COMI") is located (see 11 U.S.C. §§ 1502(4) and 1517(b)(1))—and foreign "nonmain" proceedings, which may be pending in countries where the debtor merely has an "establishment" (see 11 U.S.C. §§ 1502(5) and 1517(b)(2)). A debtor's COMI is presumed to be the location of the debtor's registered office, or habitual residence in the case of an individual. See 11 U.S.C. § 1516(c). An establishment is defined by section 1502(2) as "any place of operations where the debtor carries out a nontransitory economic activity." 

Upon recognition of a foreign "main" proceeding, section 1520(a) of the Bankruptcy Code provides that certain provisions of the Bankruptcy Code automatically come into force, including: (i) the automatic stay preventing creditor collection efforts with respect to the debtor or its U.S. assets (section 362, subject to certain enumerated exceptions); (ii) the right of any entity asserting an interest in the debtor's U.S. assets to "adequate protection" of that interest (section 361); and (iii) restrictions on use, sale, lease, transfer, or encumbrance of the debtor's U.S. assets (sections 363, 549, and 552). 

Following recognition of a foreign main or nonmain proceeding, section 1521(a) provides that, to the extent not already in effect, and "where necessary to effectuate the purpose of [chapter 15] and to protect the assets of the debtor or the interests of the creditors," the bankruptcy court may grant "any appropriate relief."

Such relief includes, among other things, a stay of any action against the debtor or its U.S. assets not covered by the automatic stay (see 11 U.S.C. §§ 1521(a)(1) and (2)), an order suspending the debtor's right to transfer or encumber its U.S. assets, an order authorizing discovery regarding the "debtor's assets, affairs, rights, obligations or liabilities" (11 U.S.C. § 1521(a)(4)), and an order "granting any additional relief that may be available to a trustee," with certain exceptions. 11 U.S.C. § 1521(a)(7)). 

Section 1507(a) of the Bankruptcy Code provides that, upon 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." However, the court must consider whether any such assistance, "consistent with principles of comity," will reasonably ensure that: (i) all stakeholders are treated fairly; (ii) U.S. creditors are not prejudiced or inconvenienced by asserting their claims in the foreign proceeding; (iii) the debtor's assets are not preferentially or fraudulently transferred; (iv) proceeds of the debtor's assets are distributed substantially in accordance with the order prescribed by the Bankruptcy Code; and (v) if appropriate, an individual foreign debtor is given the opportunity for a fresh start. See 11 U.S.C. § 1507(b).  

Section 1522(a) provides that the bankruptcy court may exercise its discretion to order the relief authorized by sections 1519 and 1521 upon the commencement of a case or recognition of a foreign proceeding "only if the interests of the creditors and other interested entities, including the debtor, are sufficiently protected." 

Section 1506 sets forth a public policy exception to any of the relief otherwise authorized in chapter 15, providing that "[n]othing in this chapter prevents the court from refusing to take an action governed by this chapter if the action would be manifestly contrary to the public policy of the United States." 

Section 1509(b) provides that, if the U.S. bankruptcy court recognizes a foreign proceeding, the foreign representative may apply directly to another U.S. court for appropriate relief, and a U.S. court "shall grant comity or cooperation to the foreign representative." However, if a U.S. bankruptcy court denies a petition for recognition of a foreign proceeding, section 1509(d) authorizes the court to "issue any appropriate order necessary to prevent the foreign representative from obtaining comity or cooperation" from U.S. courts.  

Dispute Over Eligibility for Chapter 15 Relief 

Despite the express language of section 103(a), courts sometimes disagree over whether a foreign debtor must satisfy both sections 109 and 1502 to be eligible for chapter 15 relief. 

In Barnet, the Second Circuit ruled that section 109(a) applies in a chapter 15 case on the basis of a "straightforward" interpretation of the statutory provisions. 

The Second Circuit rejected the argument that section 109(a) does not apply because the Australian company in the case was a "debtor" under the Australian Corporations Act (rather than under the Bankruptcy Code) and the foreign representatives (rather than the debtor) were seeking recognition of the foreign proceeding. According to the court: 

[T]he presence of a debtor is inextricably intertwined with the very nature of a Chapter 15 proceeding … [and] [i]t stretches credulity to argue that the ubiquitous references to a debtor in both Chapter 15 and the relevant definitions of Chapter 1 do not refer to a debtor under the title [title 11] that contains both chapters. 

Barnet, 737 F.3d at 248. In addition to the statutory definitions of "foreign representative," "foreign main proceeding," "debtor," and "foreign proceeding," the court noted, the automatic and discretionary relief provisions that accompany recognition of a foreign main proceeding (see sections 1520 and 1521) are similarly "directed towards debtors." Barnet, 737 F.3d at 248. 

The Second Circuit flatly rejected the foreign representatives' argument that a foreign debtor need satisfy only the chapter 15-specific definition of "debtor" in section 1502(1), and not the section 109 requirements. "This argument also fails," the court wrote, "as we cannot see how such a preclusive reading of Section 1502 is reconcilable with the explicit instruction in Section 103(a) to apply Chapter 1 to Chapter 15." Id. at 249.

According to the Second Circuit, not only a "plain meaning" analysis but also the context and purpose of chapter 15 support the application of section 109(a) to chapter 15. The court explained that Congress amended section 103 to state that chapter 1 applies in cases under chapter 15 at the same time it enacted chapter 15, which strongly supports the conclusion that lawmakers intended section 103(a) to mean what it says—namely, that chapter 1 applies in cases under chapter 15. 

The court acknowledged that the strongest support for the foreign representatives' arguments lies in 28 U.S.C. § 1410, which provides a U.S. venue for chapter 15 cases even when "the debtor does not have a place of business or assets in the United States." However, the Second Circuit explained that this venue statute "is purely procedural" and that, "[g]iven the unambiguous nature of the substantive and restrictive language used in Sections 103 and 109 of Chapter 15, to allow the venue statute to control the outcome would be to allow the tail to wag the dog." Id. at 250.

Finally, the Second Circuit found that the purpose of chapter 15 would not be undermined by making section 109(a) applicable in chapter 15 cases. The Second Circuit explained that section 1501(a) of the Bankruptcy Code provides that the purpose of chapter 15 "is to incorporate the Model Law … so as to provide effective mechanisms for dealing with cases of cross-border insolvency." Although section 109(a), or its equivalent, is not included in the Model Law, the Second Circuit emphasized, the Model Law allows a country enacting it to "modify or leave out some of its provisions." In any case, the court concluded, the omission of a provision similar to section 109(a) from the Model Law does not suffice to outweigh the express language Congress used in adopting sections 103(a) and 109(a). Id. at 251. 

The Second Circuit accordingly vacated the recognition order and remanded the case to the bankruptcy court for further proceedings consistent with its ruling. 

The Second Circuit did not provide any guidance as to how extensive a foreign debtor's property holdings in the United States must be to qualify for chapter 15 relief. On remand, the bankruptcy court answered that question in In re Octaviar Administration Pty Ltd., 511 B.R. 361 (Bankr. S.D.N.Y. 2014), ruling that, consistent with case law analyzing the scope of section 109 for the purpose of determining who is eligible to commence a case under chapter 11, the requirement of property in the United States should be interpreted broadly. Because the Australian debtor had causes of action governed under U.S. law against parties in the United States and also had an undrawn retainer maintained in the United States, the bankruptcy court held that the requirement for the debtor to have property located in the United States was satisfied.

Guided by Barnet, other bankruptcy courts within the Second Circuit have similarly concluded that section 109 applies in chapter 15 cases and that satisfying its U.S. asset requirement is not difficult. See, e.g., In re Agro Santino, OOD, 653 B.R. 79 (Bankr. S.D.N.Y. 2023) (unused attorney retainers deposited by the debtor in a N.Y. bank account and a $1.5 million counterclaim in pending N.Y. litigation); In re Olinda Star Ltd., 614 B.R. 28 (Bankr. S.D.N.Y. 2020) (small retainer and rights under New York law debt instruments); In re Serviços de Petróleo Constellation, 613 B.R. 497 (Bankr. S.D.N.Y. 2019) (rights under New York law-governed debt and retainer); In re Ascot Fund Ltd., 603 B.R. 271 (Bankr. S.D.N.Y. 2019) (retainer, interest in a New York partnership, and contract rights); In re P.T. Bakrie Telecom TBK, 601 B.R. 707 (Bankr. S.D.N.Y. 2019) (rights under a New York law indenture and New York law-governed notes); In re B.C.I. Fins. Pty Ltd., 583 B.R. 288 (Bankr. S.D.N.Y. 2018) (B.J. Lane) (attorney retainers deposited by foreign debtors in the United States for the sole purpose of satisfying section 109(a) and obtaining discovery adequate).  

Several courts outside of the Second Circuit, including the Eleventh Circuit, have disagreed with Barnet. For example, in In re Bemarmara Consulting A.S., No. 13-13037(KG) (Bankr. D. Del. Dec. 17, 2013), the U.S. Bankruptcy Court for the District of Delaware ruled that section 109(a) does not apply in chapter 15 because it is the foreign representative, and not the debtor in the foreign proceeding, who petitions the court. Moreover, the court wrote, "there is nothing in [the] definition [of 'debtor'] in Section 1502 which reflects upon a requirement that [a] Debtor have assets." See Transcript of Hearing at 9, l. 11‒18, In re Bemarmara Consulting A.S., No. 13-13037(KG) (Bankr. D. Del. Dec. 17, 2013) [Document No. 39]. "A Debtor," the court noted, "is an entity that is involved in a foreign proceeding." 

A Florida bankruptcy court similarly refused to apply section 109(a) in a chapter 15 case in In re MMX Sudeste Minercao S.A., No. 17-16113-RAM (Bankr. S.D. Fla. 2017) (Order Granting Recognition, Docket No. 9, June 12, 2017; Transcript of Nov. 1, 2017, Hearing Denying Motion to Dismiss Ch. 15 Case at 5-6, Docket No. 51), appeal dismissed for lack of jurisdiction, No. 17-24038-RNS (S.D. Fla. Apr. 20, 2018). 

Apparently, only one court outside of the Second Circuit has relied on Barnet in a published opinion in finding that section 109(a) applies in a chapter 15 case. See In re Forge Grp. Power Pty Ltd., 2018 WL 827913, at *13 (N.D. Cal. Feb. 12, 2018) (vacating a bankruptcy court order denying chapter 15 recognition on the basis of Barnet, but noting that "the debtor eligibility requirements of 11 U.S.C. § 109(a) apply in Chapter 15 cases" and "the requirement of 'property in the United States' is satisfied by a security retainer that remains the property of the debtor until the funds are applied by the attorney for services actually rendered").

In In re Al Zawawi, 97 F.4th 1244 (11th Cir. 2024), the Eleventh Circuit split with the Second Circuit on this issue. Based on Eleventh Circuit precedent predating the enactment of chapter 15, the Eleventh Circuit affirmed a district court ruling that chapter 15 has its own eligibility requirements, and that the eligibility requirements for debtors in cases under other chapters of the Bankruptcy Code do not apply in chapter 15 cases. 

Leading bankruptcy commentators have also been critical of Barnet. See Collier on Bankruptcy ¶ 1517.01 (16th ed. 2024) (noting that Barnet "clearly misconstrues the intent of the statute to focus on eligibility of the foreign proceeding, not of the debtor, never mentions the direction of section 1508 to consider the international origin of chapter 15 and does not follow the suggestion of the legislative history of section 1508 to consult the [Model Law] Guide to Enactment … [which] makes clear that "the Model Law was formulated to apply to any proceeding that meets the requirements of article 2, subparagraph (a) [definition of foreign proceeding], independently of the nature of the debtor or its particular status under national law.") (citations omitted); Glosband and Westbrook, "Chapter 15 Recognition in the U.S.: Is a Debtor 'Presence' Required?," 24 Int. Insolv. Rev. 28–56 (2015) (noting that the Second Circuit "confuse[d] the foreign debtor with the foreign insolvency representative" and explaining that section 109(a) does apply in chapter 15 cases, but only in limited circumstances, including: (i) the requirement that a foreign debtor have a presence in the United States when a foreign representative use its power under section 1511 to file a "full" case under another chapter; and (ii) when a foreign debtor files a bankruptcy case in the United States to enforce a foreign discharge).

It should be noted that chapter 15's predecessor—section 304 of the Bankruptcy Code—did not require a foreign debtor to qualify as a "debtor" under section 109(a) as a condition to relief. See, e.g., Goerg v. Parungao (In re Goerg), 844 F.2d 1562 (11th Cir. 1988); Saleh v. Triton Container Intl., Ltd. (In re Saleh), 175 B.R. 422 (Bankr. S.D. Fla. 1994).

B.C.I. Finances 

ACN 078 881 035 Pty Limited (formerly Shield Holdings Australia Pty Limited) (the "debtor") is part of a group of Australian companies (the "Binetter Companies") owned by the Binetter family's once-thriving international beverage empire. That empire crumbled after evidence surfaced that the Binetters had engaged in a 20-plus-year tax evasion scheme. 

In 2014, an Australian court appointed a liquidator for four of the Binetter Companies. The liquidator sued and obtained judgments of more than $100 million against Binetter family members and affiliated entities. In 2018, six additional Binetter Companies went into liquidation in Australia, and an 11th Binetter company—the debtor—entered liquidation in 2024. The same liquidator was appointed by the Australian court for all 11 companies.

Beginning in 2017, the liquidator, as the foreign representative for the Binetter Companies (the "FR"), filed successive chapter 15 cases on behalf of the companies (including the debtor, in March 2025) in the U.S. Bankruptcy Court for the Southern District of New York (the "bankruptcy court") seeking recognition of the Binetter Companies' Australian liquidation proceeding as a foreign main proceeding. The proceeding was for the principal purpose of obtaining discovery regarding the U.S. assets of Binetter family members and investigating potential claims against parties in the United States that may have participated in the Binetters' tax evasion, diversion of assets, and other misconduct. The 11 chapter 15 cases were administratively consolidated. 

In 2018 and 2021, U.S. Bankruptcy Judge Sean Lane granted the chapter 15 recognition petitions filed by the FC on behalf of the initial 10 Binetter Companies, finding, among other things, that the debtors satisfied the chapter 15 eligibility requirements in accordance with Barnet because they had deposited funds to pay attorneys' fees in a U.S. bank. Those 10 cases were transferred to U.S. Bankruptcy Judge Philip Bentley in 2023. 

The FR filed a chapter 15 petition on behalf of the debtor in March 2025, again seeking recognition of the Australian liquidation for the principal purpose of obtaining discovery in the United States to identify Binetter family assets in the United States and investigate potential claims in the United States against U.S.-based individuals. In the chapter 15 petition, the FR stated that, although the debtor did not have a domicile or place of business in the United States, the debtor qualified as a "debtor" under section 109(a) (and chapter 15) because shortly before the petition date, it had opened an account in a New York City bank to pay its anticipated attorneys' fees. 

Three Binetter family members (the "objectors") opposed the debtor's chapter 15 petition, arguing, among other things, that the debtor was not eligible to be a chapter 15 debtor under section 109(a) of the Bankruptcy Code. In particular, they urged the bankruptcy court to reject the settled rule established by Barnet because it makes section 109(a)'s eligibility requirements (namely, "property in the United Sates") so easy to circumvent that it essentially nullifies those requirements. They also argued that this approach contravenes basic principles of statutory construction and permits debtors to manipulate section 109(a)'s eligibility requirements improperly.

The Bankruptcy Court's Ruling 

Initially, the bankruptcy court ruled that, leaving aside the question of eligibility under section 109(a), the FR had satisfied the various requirements for chapter 15 recognition and related relief set forth in sections 1507, 1517, 1520, and 1521 of the Bankruptcy Code—e.g., the FR was a proper foreign representative, the Australian liquidation qualified as a foreign main proceeding, and the relief sought by the FR was warranted. B.C.I. Finances, 671 B.R. at 673–74.

Turning to the objectors' arguments regarding section 109(a), Judge Bentley noted that, since Barnet, courts in the Second Circuit have uniformly held that a chapter 15 debtor's creation of an attorney retainer account in a U.S. bank is sufficient to satisfy section 109(a). Id. at 674–75 (citations omitted).

The bankruptcy court rejected the objectors' argument that a literal reading of section 109(a) effectively nullifies the provision's eligibility requirements in contravention of the canon of statutory construction against surplusage. That canon, Judge Bentley explained, provides that courts "should give effect, if possible, to every word of a statute" to avoid treating any statutory term as "mere surplusage." Id. at 675 (citation omitted). However, he noted, the canon applies only if the language of a statute is ambiguous, which is not the case with respect to section 109(a). 

Judge Bentley further emphasized that "notably absent" from section 109(a) is any qualification of the "property in the United States" requirement, such as a specified minimum amount of property in the United States owned by the debtor, a requirement that the debtor have owned the property for any particular period of time, or any restrictions on the circumstances under which the debtor acquired the property (e.g., excluding property acquired by the debtor for the purpose of establishing chapter 15 filing eligibility). Id. at 675–76.

Moreover, Judge Bentley noted, there is no conflict between section 109(a)'s plain meaning and any other provision in the Bankruptcy Code or "with any of the purposes of chapter 15 of the Code as a whole." Id. In short, he concluded, section 109(a) may be "toothless" in terms of restricting chapter 15 eligibility, "[b]ut being toothless does not warrant setting aside the provision on absurdity grounds unless it is quite impossible that Congress could have intended [this] result, … an exceptionally rare occurrence." Id. at 676 (citations and internal quotation marks omitted).

According to the bankruptcy court, to further the core objectives of chapter 15—i.e., promoting cooperation and coordination between U.S. and foreign courts regarding cross-border bankruptcy cases, fair and efficient administration of such cases to protect the interests of stakeholders, and protection and maximization of the value of a debtor's assets—lawmakers plausibly could have intended access to chapter 15 to be relatively easy. Through ease of access, Judge Bentley explained, foreign debtors could benefit from the automatic stay or similar injunctive relief to prevent creditor collection efforts outside of the debtors' foreign bankruptcy proceedings, or engage in discovery regarding U.S. assets or potential causes of action. See 11 U.S.C. §§ 1507, 1520, and 1521. 

Absent such ease of access to chapter 15 recognition, the court noted, the plain terms of section 1509(b) and (c) would appear to preclude a foreign representative from requesting discovery from any U.S. federal district or state court, except arguably under 28 U.S.C. § 1782, which could authorize discovery by a foreign representative but is subject to significant limitations because it is discretionary and narrower in scope than wide-ranging discovery available under section 1521. Id. at 677–78.

Furthermore, the bankruptcy court explained, easy access to chapter 15 based on an attorney retainer account in a U.S. bank does not mean that a bankruptcy court is powerless in cases of clear abuse or other activities detrimental to creditors or otherwise contrary to the purposes of chapter 15. For example, Judge Bentley noted, section 305 of the Bankruptcy Code authorizes a bankruptcy court, post recognition, to abstain from presiding over a chapter 15 case if "the purposes of chapter 15 … would be best served by such dismissal or suspension." In addition, under section 1522(a), a court is obligated to deny relief available under sections 1519 (pre-recognition relief) or 1521 (post-recognition relief) if the interests of stakeholders are not sufficiently protected, and section 1521(a) provides that post-recognition relief may be granted only "where necessary to effectuate the purpose of [chapter 15] and to protect the assets of the debtor or the interests of the creditors." Id. at 678-79.

Finally, the bankruptcy court rejected the objectors' argument that a literal reading of section 109(a) to allow access to chapter 15 on the basis of an attorney retainer account invites improper manipulation because an FR could readily manufacture that basis without having any meaningful business presence in the United States or legitimate reason to file for chapter 15. According to Judge Bentley, "in the chapter 15 context, the courts have ample statutory tools to dispose of or otherwise manage improvidently-filed cases, see, e.g., Bankruptcy Code §§ 305(a)(2), 1522(a), without the need to distort the plain terms of the Code § 109(a)'s eligibility requirements." Id. at 679–80. 

Outlook 

The bankruptcy court's ruling in B.C.I. Finances does not break any new ground regarding the prevailing interpretation of chapter 15's eligibility requirements. It is consistent with what has emerged as the majority rule on this issue, even though its adherents are almost exclusively courts in the Second Circuit following the binding precedent in Barnet.

Even so, the decision in B.C.I. Finances is notable because it articulates the rationale of the approach in the context of the purposes and policies underpinning chapter 15. As noted by the bankruptcy court, the plain language of section 109(a) suggests that lawmakers intended access to chapter 15 relief to be relatively easy, at least insofar as the requirement that a foreign debtor is eligible for chapter 15 relief as long as it has some property in the United States, but not necessarily extensive business or other contacts in or to the country. Indeed, under appropriate facts and circumstances, the requirements of section 109(a) may be satisfied if there are plausible U.S.-law governed causes of action or non-U.S. law governed litigation claims against U.S.-based companies or individuals. 

Given the importance of chapter 15 in, among other things, permitting foreign debtors with assets in the United States or U.S. dollar-denominated debt to obtain a stay of creditor collection efforts in the United States pending administration of its U.S. assets in a foreign bankruptcy proceeding or to obtain discovery regarding potential causes of action, the rationale of B.C. Finances is understandable. Of course, the circuit split between the Second and Eleventh Circuits on the application of section 109(a) in chapter 15 cases remains unresolved, and may be an invitation to U.S. Supreme Court review or congressional action.