Jaffé v Samsung Electronics Co., Ltd.: Exploring the Limits of ‘Additional Relief ’ and ‘Additional Assistance’ under Chapter 15 of the US Bankruptcy Code (2014)

Summary:

Chapter 15 of the US Bankruptcy Code is drafted to provide administrators of non-US insolvency proceedings considerable latitude in seeking and obtaining assistance from US Bankruptcy Courts.  Beyond the relief that follows automatically with recognition of such proceedings in US courts, both sections 1507 and 1521 of the Bankruptcy Code make ‘additional relief ’ or ‘special assistance’ available for the administration of such proceedings.

But this assistance is not without its limits: Sections 15071 and 15222 each condition the Court’s provision of ‘additional assistance’ on the requirement that the Court provide appropriate ‘protection’ for creditors of the non-US debtor.  Section 1506 separately permits US Bankruptcy Courts to refuse relief ‘if [that relief] would be manifestly contrary to the public policy of the
United States’.

The latter section (section 1506) is known colloquially as chapter 15’s ‘public policy exception’, and its application remains somewhat unclear.  At least two appellate courts have found, under differing circumstances, that it does not apply; but to date, no appellate decision has found that it does.  The Fourth Circuit Court of Appeals, however, has at least added to the growing discussion surrounding section 1506.  Jaffe v Samsung Electronics Co., Ltd., though decided on other grounds, nevertheless provides food for thought on how sections 1507 and 1522 may – or may not – work together with section 1506 to impact the ‘additional relief ’ and ‘additional assistance’ otherwise available to administrators under chapter 15.

This 2014 article is accessible here.  Republished with kind permission of Chase Cambria Company (Publishing) Ltd.