153
mental unit’s claim. If the debtor’s liability to a govern-
mental unit arises from a debt or obligation owed or in-
curred by another individual, entity, or organization, or
under a different name, the debtor shall identify such indi-
vidual, entity, organization, or name.
‘‘(h) The clerk shall keep and update quarterly, in
the form and manner as the Director of the Administra-
tive Office of the United States Courts prescribes, and
make available to debtors, a register in which a govern-
mental unit may designate a safe harbor mailing address
for service of notice in cases pending in the district. A
governmental unit may file a statement with the clerk des-
ignating a safe harbor address to which notices are to be
sent, unless such governmental unit files a notice of
change of address.’’.
(b) ADOPTION OF RULES PROVIDING NOTICE.—The
Advisory Committee on Bankruptcy Rules of the Judicial
Conference shall, within a reasonable period of time after
the date of the enactment of this Act, propose for adoption
enhanced rules for providing notice to State, Federal, and
local government units that have regulatory authority over
the debtor or which may be creditors in the debtor’s case.
Such rules shall be reasonably calculated to ensure that
notice will reach the representatives of the governmental
unit, or subdivision thereof, who will be the proper persons
154
authorized to act upon the notice. At a minimum, the rules
should require that the debtor—
(1) identify in the schedules and the notice, the
subdivision, agency, or entity in respect of which
such notice should be received;
(2) provide sufficient information (such as case
captions, permit numbers, taxpayer identification
numbers, or similar identifying information) to per-
mit the governmental unit or subdivision thereof, en-
titled to receive such notice, to identify the debtor or
the person or entity on behalf of which the debtor
is providing notice where the debtor may be a suc-
cessor in interest or may not be the same as the per-
son or entity which incurred the debt or obligation;
and
(3) identify, in appropriate schedules, served to-
gether with the notice, the property in respect of
which the claim or regulatory obligation may have
arisen, if any, the nature of such claim or regulatory
obligation and the purpose for which notice is being
given.
(c) EFFECT OF FAILURE OF NOTICE.—Section 342
of title 11, United States Code, as amended by subsection
(a) and section 405, is amended by adding at the end the
following:
155
‘‘(i)(1) A notice that does not comply with sub-
sections (d) and (e) shall have no effect unless the debtor
demonstrates, by clear and convincing evidence, that time-
ly notice was given in a manner reasonably calculated to
satisfy the requirements of this section was given, and
that—
‘‘(A) either the notice was timely sent to the
safe harbor address provided in the register main-
tained by the clerk of the district in which the case
was pending for such purposes; or
‘‘(B) no safe harbor address was provided in
such list for the governmental unit and that an offi-
cer of the governmental unit who is responsible for
the matter or claim had actual knowledge of the case
in sufficient time to act.
‘‘(2) No sanction under section 362(h) of this title
or any other sanction which a court may impose on ac-
count of violations of the stay under section 362(a) of this
title or failure to comply with section 542 or 543 of this
title may be imposed unless the action takes place after
notice of the commencement of the case as required by
this section has been received.’’.
156
SEC. 504. NOTICE OF REQUEST FOR A DETERMINATION OF
TAXES.
Section 505(b) of title 11, United States Code, is
amended by striking ‘‘Unless’’ at the beginning of the sec-
ond sentence thereof and inserting ‘‘If the request is made
in the manner designated by the governmental unit and
unless’’.
SEC. 505. RATE OF INTEREST ON TAX CLAIMS.
Chapter 5 of title 11, United States Code, is amended
by adding at the end the following:
‘‘§ 511. Rate of interest on tax claims
‘‘Notwithstanding any provision of this title that re-
quires the payment of interest on a claim, if interest is
required to be paid on a tax claim, the rate of interest
shall be as follows:
‘‘(1) In the case of ad valorem tax claims,
whether secured or unsecured, other unsecured tax
claims where interest is required to be paid under
section 726(a)(5) of this title and secured tax claims
the rate shall be determined under applicable non-
bankruptcy law.
‘‘(2) In the case of unsecured claims for taxes
arising before the date of the order for relief and
paid under a plan of reorganization, the minimum
rate of interest to be applied during the period after
the filing of the petition shall be the Federal short-
157
term rate rounded to the nearest full percent, deter-
mined under section 1274(d) of the Internal Reve-
nue Code of 1986, for the calendar month in which
the plan is confirmed, plus 3 percentage points.’’.
SEC. 506. TOLLING OF PRIORITY OF TAX CLAIM TIME
PERIODS.
Section 507(a)(9)(A) of title 11, United States Code,
as so redesignated, is amended—
(1) in clause (i) by inserting after ‘‘petition’’
and before the semicolon ‘‘, plus any time, plus 6
months, during which the stay of proceedings was in
effect in a prior case under this title’’; and
(2) amend clause (ii) to read as follows:
‘‘(ii) assessed within 240 days before
the date of the filing of the petition, exclu-
sive of—
‘‘(I) any time plus 30 days dur-
ing which an offer in compromise with
respect of such tax, was pending or in
effect during such 240-day period;
‘‘(II) any time plus 30 days dur-
ing which an installment agreement
with respect of such tax was pending
or in effect during such 240-day pe-
riod, up to 1 year; and
158
‘‘(III) any time plus 6 months
during which a stay of proceedings
against collections was in effect in a
prior case under this title during such
240-day period.’’.
SEC. 507. ASSESSMENT DEFINED.
(a) ASSESSMENT DEFINED
FOR PRIORITY PUR-
POSES.—Section 101 of title 11, United States Code, is
amended by inserting after paragraph (2) the following:
‘‘(3) ‘assessment’—
‘‘(A) for purposes of State and local taxes,
means that point in time when all actions re-
quired have been taken so that thereafter a tax-
ing authority may commence an action to col-
lect the tax; and
‘‘(B) for Federal tax purposes has the
meaning given such term in the Internal Reve-
nue Code of 1986,
and ‘assessed’ and ‘assessable’ shall be interpreted
in light of the definition of assessment in this para-
graph;’’.
(b) ASSESSMENT DEFINED FOR THE STAY OF PRO-
CEEDINGS.—Section 362(b)(9)(D) of title 11, United
States Code, is amended by inserting after ‘‘the making
of an assessment’’ the following: ‘‘as defined by applicable
159
nonbankruptcy law notwithstanding the definition of an
‘assessment’ elsewhere in this title’’.
SEC. 508. CHAPTER 13 DISCHARGE OF FRAUDULENT AND
OTHER TAXES.
Section 1328(a)(2) of title 11, United States Code,
is amended by inserting ‘‘(1),’’ after ‘‘paragraph’’.
SEC. 509. CHAPTER 11 DISCHARGE OF FRAUDULENT TAXES.
Section 1141(d) of title 11, United States Code, as
amended by section 119A, is amended by adding at the
end the following:
‘‘(6) Notwithstanding the provisions of paragraph
(1), the confirmation of a plan does not discharge a debtor
which is a corporation from any debt for a tax or customs
duty with respect to which the debtor made a fraudulent
return or willfully attempted in any manner to evade or
defeat such tax.’’.
SEC. 510. STAY OF TAX PROCEEDINGS.
(a) SECTION 362 STAY LIMITED TO PREPETITION
TAXES.—Section 362(a)(8) of title 11, United States
Code, is amended by striking the period at the end and
inserting ‘‘, in respect of a tax liability for a taxable period
ending before the order for relief.’’.
(b) APPEAL
OF
TAX
COURT
DECISIONS
PER-
MITTED.—Section 362(b)(9) of title 11, United States
Code, is amended—
160
(1) in subparagraph (C) by striking ‘‘or’’ at the
end;
(2) in subparagraph (D) by striking the period
at the end and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(E) the appeal of a decision by a court or
administrative tribunal which determines a tax
liability of the debtor without regard to whether
such determination was made prepetition or
postpetition.’’.
SEC. 511. PERIODIC PAYMENT OF TAXES IN CHAPTER 11
CASES.
Section 1129(a)(9) of title 11, United States Code,
is amended—
(1) in subparagraph (B) by striking ‘‘and’’ at
the end; and
(2) in subparagraph (C)—
(A) by striking ‘‘deferred cash payments,
over a period not exceeding six years after the
date of assessment of such claim,’’ and insert-
ing ‘‘regular installment payments in cash, but
in no case with a balloon provision, and no
more than three months apart, beginning no
later than the effective date of the plan and
ending on the earlier of five years after the pe-
161
tition date or the last date payments are to be
made under the plan to unsecured creditors,’’;
(B) by striking the period at the end and
inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(D) with respect to a secured claim which
would be described in section 507(a)(8) of this
title but for its secured status, the holder of
such claim will receive on account of such claim
cash payments of not less than is required in
subparagraph (C) and over a period no greater
than is required in such subparagraph.’’.
SEC. 512. AVOIDANCE OF STATUTORY TAX LIENS PROHIB-
ITED.
Section 545(2) of title 11, United States Code, is
amended by striking the semicolon at the end and insert-
ing ‘‘, except where such purchaser is a purchaser de-
scribed in section 6323 of the Internal Revenue Code of
1986 or similar provision of State or local law;’’.
SEC. 513. PAYMENT OF TAXES IN THE CONDUCT OF
BUSINESS.
(a) PAYMENT OF TAXES REQUIRED.—Section 960 of
title 28, United States Code, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘Any’’; and
(2) by adding at the end the following:
162
‘‘(b) Such taxes shall be paid when due in the conduct
of such business unless—
‘‘(1) the tax is a property tax secured by a lien
against property that is abandoned within a reason-
able time after the lien attaches, by the trustee of
a bankruptcy estate, pursuant to section 554 of title
11; or
‘‘(2) payment of the tax is excused under a spe-
cific provision of title 11.
‘‘(c) In a case pending under chapter 7 of title 11,
payment of a tax may be deferred until final distribution
is made under section 726 of title 11 if—
‘‘(1) the tax was not incurred by a trustee duly
appointed under chapter 7 of title 11; or
‘‘(2) before the due date of the tax, the court
has made a finding of probable insufficiency of
funds of the estate to pay in full the administrative
expenses allowed under section 503(b) of title 11
that have the same priority in distribution under
section 726(b) of title 11 as such tax.’’.
(b) PAYMENT OF AD VALOREM TAXES REQUIRED.—
Section 503(b)(1)(B) of title 11, United States Code, is
amended in clause (i) by inserting after ‘‘estate,’’ and be-
fore ‘‘except’’ the following: ‘‘whether secured or unse-
163
cured, including property taxes for which liability is in rem
only, in personam or both,’’.
(c) REQUEST FOR PAYMENT OF ADMINISTRATIVE
EXPENSE TAXES ELIMINATED.—Section 503(b)(1) of
title 11, United States Code, is amended by adding at the
end the following:
‘‘(D) notwithstanding the requirements of sub-
section (a) of this section, a governmental unit shall
not be required to file a request for the payment of
a claim described in subparagraph (B) or (C);’’.
(d) PAYMENT OF TAXES AND FEES AS SECURED
CLAIMS.—Section 506 of title 11, United States Code, is
amended—
(1) in subsection (b) by inserting ‘‘or State
statute’’ after ‘‘agreement’’; and
(2) in subsection (c) by inserting ‘‘, including
the payment of all ad valorem property taxes in re-
spect of the property’’ before the period at the end.
SEC. 514. TARDILY FILED PRIORITY TAX CLAIMS.
Section 726(a)(1) of title 11, United States Code, is
amended by striking ‘‘before the date on which the trustee
commences distribution under this section’’ and inserting
‘‘on or before the earlier of 10 days after the mailing to
creditors of the summary of the trustee’s final report or
164
the date on which the trustee commences final distribution
under this section’’.
SEC. 515. INCOME TAX RETURNS PREPARED BY TAX
AUTHORITIES.
Section 523(a)(1)(B) of title 11, United States Code,
is amended—
(1) by inserting ‘‘or equivalent report or no-
tice,’’ after ‘‘a return,’’;
(2) in clause (i)—
(A) by inserting ‘‘or given’’ after ‘‘filed’’;
and
(B) by striking ‘‘or’’ at the end;
(3) in clause (ii)—
(A) by inserting ‘‘or given’’ after ‘‘filed’’;
and
(B) by inserting ‘‘, report, or notice’’ after
‘‘return’’; and
(4) by adding at the end the following:
‘‘(iii) for purposes of this subsection,
a return—
‘‘(I) must satisfy the require-
ments of applicable nonbankruptcy
law, and includes a return prepared
pursuant to section 6020(a) of the In-
ternal Revenue Code of 1986, or simi-
165
lar State or local law, or a written
stipulation to a judgment entered by a
nonbankruptcy tribunal, but does not
include a return made pursuant to
section 6020(b) of the Internal Reve-
nue Code of 1986, or similar State or
local law; and
‘‘(II) must have been filed in a
manner permitted by applicable non-
bankruptcy law; or’’.
SEC. 516. DISCHARGE OF THE ESTATE’S LIABILITY FOR UN-
PAID TAXES.
Section 505(b) of title 11, United States Code, is
amended in the second sentence by inserting ‘‘the estate,’’
after ‘‘misrepresentation,’’.
SEC. 517. REQUIREMENT TO FILE TAX RETURNS TO CON-
FIRM CHAPTER 13 PLANS.
(a) FILING
OF PREPETITION TAX RETURNS RE-
QUIRED FOR PLAN CONFIRMATION.—Section 1325(a) of
title 11, United States Code, as amended by section 146,
is amended—
(1) in paragraph (6) by striking ‘‘and’’ at the
end;
(2) in paragraph (7) by striking the period at
the end and inserting ‘‘; and’’; and
166
(3) by adding at the end the following:
‘‘(8) if the debtor has filed all Federal, State,
and local tax returns as required by section 1308 of
this title.’’.
(b) ADDITIONAL TIME PERMITTED FOR FILING TAX
RETURNS.—(1) Chapter 13 of title 11, United States
Code, is amended by adding at the end the following:
‘‘§ 1308. Filing of prepetition tax returns
‘‘(a) On or before the day prior to the day on which
the first meeting of the creditors is convened under section
341(a) of this title, the debtor shall have filed with appro-
priate tax authorities all tax returns for all taxable periods
ending in the 6-year period ending on the date of filing
of the petition.
‘‘(b) If the tax returns required by subsection (a)
have not been filed by the date on which the first meeting
of creditors is convened under section 341(a) of this title,
the trustee may continue such meeting for a reasonable
period of time, to allow the debtor additional time to file
any unfiled returns, but such additional time shall be no
more than—
‘‘(1) for returns that are past due as of the
date of the filing of the petition, 120 days from such
date;
167
‘‘(2) for returns which are not past due as of
the date of the filing of the petition, the later of 120
days from such date or the due date for such re-
turns under the last automatic extension of time for
filing such returns to which the debtor is entitled,
and for which request has been timely made, accord-
ing to applicable nonbankruptcy law; and
‘‘(3) upon notice and hearing, and order en-
tered before the lapse of any deadline fixed accord-
ing to this subsection, where the debtor dem-
onstrates, by clear and convincing evidence, that the
failure to file the returns as required is because of
circumstances beyond the control of the debtor, the
court may extend the deadlines set by the trustee as
provided in this subsection for—
‘‘(A) a period of no more than 30 days for
returns described in paragraph (1) of this sub-
section; and
‘‘(B) for no more than the period of time
ending on the applicable extended due date for
the returns described in paragraph (2).
‘‘(c) For purposes of this section only, a return in-
cludes a return prepared pursuant to section 6020 (a) or
(b) of the Internal Revenue Code of 1986 or similar State
168
or local law, or a written stipulation to a judgment entered
by a nonbankruptcy tribunal.’’.
(2) The table of sections of chapter 13 of title 11,
United States Code, is amended by inserting after the
item relating to section 1307 the following:
‘‘1308. Filing of prepetition tax returns.’’.
(c) DISMISSAL
OR CONVERSION
ON FAILURE TO
COMPLY.—Section 1307 of title 11, United States Code,
is amended—
(1) by redesignating subsections (e) and (f) as
subsections (f) and (g), respectively; and
(2) by inserting after subsection (d) the follow-
ing:
‘‘(e) Upon the failure of the debtor to file tax returns
under section 1308 of this title, on request of a party in
interest or the United States trustee and after notice and
a hearing, the court shall dismiss a case or convert a case
under this chapter to a case under chapter 7 of this title,
whichever is in the best interests of creditors and the es-
tate.’’.
(d) TIMELY FILED CLAIMS.—Section 502(b)(9) of
title 11, United States Code, is amended by striking the
period at the end and inserting ‘‘, and except that in a
case under chapter 13 of this title, a claim of a govern-
mental unit for a tax in respect of a return filed under
section 1308 of this title shall be timely if it is filed on
169
or before 60 days after such return or returns were filed
as required.’’.
(e) RULES FOR OBJECTIONS TO CLAIMS AND TO
CONFIRMATION.—It is the sense of the Congress that the
Advisory Committee on Bankruptcy Rules of the Judicial
Conference should, within a reasonable period of time
after the date of the enactment of this Act, propose for
adoption amended Federal Rules of Bankruptcy Proce-
dure which provide that—
(1) notwithstanding the provisions of Rule
3015(f), in cases under chapter 13 of title 11,
United States Code, a governmental unit may object
to the confirmation of a plan on or before 60 days
after the debtor files all tax returns required under
sections 1308 and 1325(a)(7) of title 11, United
States Code; and
(2) in addition to the provisions of Rule 3007,
in a case under chapter 13 of title 11, United States
Code, no objection to a tax in respect of a return re-
quired to be filed under such section 1308 shall be
filed until such return has been filed as required.
SEC. 518. STANDARDS FOR TAX DISCLOSURE.
Section 1125(a) of title 11, United States Code, is
amended in paragraph (1)—
170
(1) by inserting after ‘‘records,’’ the following:
‘‘including a full discussion of the potential material
Federal, State, and local tax consequences of the
plan to the debtor, any successor to the debtor, and
a hypothetical investor domiciled in the State in
which the debtor resides or has its principal place of
business typical of the holders of claims or interests
in the case,’’;
(2) by inserting ‘‘such’’ after ‘‘enable’’; and
(3) by striking ‘‘reasonable’’ where it appears
after ‘‘hypothetical’’ and by striking ‘‘typical of hold-
ers of claims or interests’’ after ‘‘investor’’.
SEC. 519. SETOFF OF TAX REFUNDS.
Section 362(b) of title 11, United States Code, as
amended by sections 130, 146, and 150 is amended—
(1) in paragraph (21) by striking ‘‘or’’;
(2) in paragraph (22) by striking the period at
the end and inserting ‘‘; or’’; and
(3) by inserting after paragraph (22) (as so re-
designated) the following:
‘‘(23) under subsection (a) of the setoff of an
income tax refund, by a governmental unit, in re-
spect of a taxable period which ended before the
order for relief against an income tax liability for a
171
taxable period which also ended before the order for
relief, unless—
‘‘(A) prior to such setoff, an action to de-
termine the amount or legality of such tax li-
ability under section 505(a) was commenced; or
‘‘(B) where the setoff of an income tax re-
fund is not permitted because of a pending ac-
tion to determine the amount or legality of a
tax liability, the governmental unit may hold
the refund pending the resolution of the ac-
tion.’’.
TITLE VI—ANCILLARY AND
OTHER CROSS-BORDER CASES
SEC. 601. AMENDMENT TO ADD A CHAPTER 6 TO TITLE 11,
UNITED STATES CODE.
(a) IN GENERAL.—Title 11, United States Code, is
amended by inserting after chapter 5 the following:
‘‘CHAPTER 6—ANCILLARY AND OTHER
CROSS-BORDER CASES
‘‘Sec.
‘‘601. Purpose and scope of application.
‘‘SUBCHAPTER I—GENERAL PROVISIONS
‘‘602. Definitions.
‘‘603. International obligations of the United States.
‘‘604. Commencement of ancillary case.
‘‘605. Authorization to act in a foreign country.
‘‘606. Public policy exception.
‘‘607. Additional assistance.
‘‘608. Interpretation.
172
‘‘SUBCHAPTER II—ACCESS OF FOREIGN REPRESENTATIVES AND
CREDITORS TO THE COURT
‘‘609. Right of direct access.
‘‘610. Limited jurisdiction.
‘‘611. Commencement of bankruptcy case under section 301 or 303.
‘‘612. Participation of a foreign representative in a case under this title.
‘‘613. Access of foreign creditors to a case under this title.
‘‘614. Notification to foreign creditors concerning a case under this title.
‘‘SUBCHAPTER III—RECOGNITION OF A FOREIGN PROCEEDING
AND RELIEF
‘‘615. Application for recognition of a foreign proceeding.
‘‘616. Presumptions concerning recognition.
‘‘617. Order recognizing a foreign proceeding.
‘‘618. Subsequent information.
‘‘619. Relief that may be granted upon petition for recognition of a foreign pro-
ceeding.
‘‘620. Effects of recognition of a foreign main proceeding.
‘‘621. Relief that may be granted upon recognition of a foreign proceeding.
‘‘622. Protection of creditors and other interested persons.
‘‘623. Actions to avoid acts detrimental to creditors.
‘‘624. Intervention by a foreign representative.
‘‘SUBCHAPTER IV—COOPERATION WITH FOREIGN COURTS AND
FOREIGN REPRESENTATIVES
‘‘625. Cooperation and direct communication between the court and foreign
courts or foreign representatives.
‘‘626. Cooperation and direct communication between the trustee and foreign
courts or foreign representatives.
‘‘627. Forms of cooperation.
‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS
‘‘628. Commencement of a case under this title after recognition of a foreign
main proceeding.
‘‘629. Coordination of a case under this title and a foreign proceeding.
‘‘630. Coordination of more than 1 foreign proceeding.
‘‘631. Presumption of insolvency based on recognition of a foreign main pro-
ceeding.
‘‘632. Rule of payment in concurrent proceedings.
‘‘§ 601. Purpose and scope of application
‘‘(a) The purpose of this chapter is to incorporate the
Model Law on Cross-Border Insolvency so as to provide
effective mechanisms for dealing with cases of cross-bor-
der insolvency with the objectives of—
‘‘(1) cooperation between—
173
‘‘(A) United States courts, United States
Trustees, trustees, examiners, debtors, and
debtors in possession; and
‘‘(B) the courts and other competent au-
thorities of foreign countries involved in cross-
border insolvency cases;
‘‘(2) greater legal certainty for trade and in-
vestment;
‘‘(3) fair and efficient administration of cross-
border insolvencies that protects the interests of all
creditors, and other interested entities, including the
debtor;
‘‘(4) protection and maximization of the value
of the debtor’s assets; and
‘‘(5) facilitation of the rescue of financially
troubled businesses, thereby protecting investment
and preserving employment.
‘‘(b) This chapter applies where—
‘‘(1) assistance is sought in the United States
by a foreign court or a foreign representative in con-
nection with a foreign proceeding;
‘‘(2) assistance is sought in a foreign country in
connection with a case under this title;
174
‘‘(3) a foreign proceeding and a case under this
title with respect to the same debtor are taking place
concurrently; or
‘‘(4) creditors or other interested persons in a
foreign country have an interest in requesting the
commencement of, or participating in, a case or pro-
ceeding under this title.
‘‘(c) This chapter does not apply to—
‘‘(1) a proceeding concerning an entity identi-
fied by exclusion in subsection 109(b);
‘‘(2) an individual, or to an individual and such
individual’s spouse, who have debts within the limits
specified in under section 109(e) and who are citi-
zens of the United States or aliens lawfully admitted
for permanent residence in the United States; or
‘‘(3) an entity subject to a proceeding under the
Securities Investor Protection Act, a stockbroker
subject to subchapter III of chapter 7 of this title,
or a commodity broker subject to subchapter IV of
chapter 7 of this title.
‘‘SUBCHAPTER I—GENERAL PROVISIONS
‘‘§ 602. Definitions
‘‘For the purposes of this chapter, the term—
‘‘(1) ‘debtor’ means an entity that is the subject
of a foreign proceeding;
175
‘‘(2) ‘establishment’ means any place of oper-
ations where the debtor carries out a nontransitory
economic activity;
‘‘(3) ‘foreign court’ means a judicial or other
authority competent to control or supervise a foreign
proceeding;
‘‘(4) ‘foreign main proceeding’ means a foreign
proceeding taking place in the country where the
debtor has the center of its main interests;
‘‘(5) ‘foreign nonmain proceeding’ means a for-
eign proceeding, other than a foreign main proceed-
ing, taking place in a country where the debtor has
an establishment;
‘‘(6) ‘trustee’ includes a trustee, a debtor in
possession in a case under any chapter of this title,
or a debtor under chapters 9 or 13 of this title; and
‘‘(7) ‘within the territorial jurisdiction of the
United States’ when used with reference to property
of a debtor refers to tangible property located within
the territory of the United States and intangible
property deemed under applicable nonbankruptcy
law to be located within that territory, including any
property subject to attachment or garnishment that
may properly be seized or garnished by an action in
a Federal or State court in the United States.
176
‘‘§ 603. International obligations of the United States
‘‘To the extent that this chapter conflicts with an ob-
ligation of the United States arising out of any treaty or
other form of agreement to which it is a party with 1 or
more other countries, the requirements of the treaty or
agreement prevail.
‘‘§ 604. Commencement of ancillary case
‘‘A case under this chapter is commenced by the filing
of a petition for recognition of a foreign proceeding under
section 615.
‘‘§ 605. Authorization to act in a foreign country
‘‘A trustee or another entity (including an examiner)
authorized by the court may be authorized by the court
to act in a foreign country on behalf of an estate created
under section 541. An entity authorized to act under this
section may act in any way permitted by the applicable
foreign law.
‘‘§ 606. Public policy exception
‘‘Nothing in this chapter prevents the court from re-
fusing to take an action governed by this chapter if the
action would be manifestly contrary to the public policy
of the United States.
‘‘§ 607. Additional assistance
‘‘(a) Subject to the specific limitations stated else-
where in this chapter the court, upon recognition of a for-
eign proceeding, to provide additional assistance to a for-
177
eign representative under this title or under other laws
of the United States.
‘‘(b) In determining whether to provide additional as-
sistance under this title or under other laws of the United
States, the court shall consider whether such additional
assistance, consistent with the principles of comity, will
reasonably assure—
‘‘(1) just treatment of all holders of claims
against or interests in the debtor’s property;
‘‘(2) protection of claim holders in the United
States against prejudice and inconvenience in the
processing of claims in such foreign proceeding;
‘‘(3) prevention of preferential or fraudulent
dispositions of property of the debtor;
‘‘(4) distribution of proceeds of the debtor’s
property substantially in accordance with the order
prescribed by this title; and
‘‘(5) if appropriate, the provision of an oppor-
tunity for a fresh start for the individual that such
foreign proceeding concerns.
‘‘§ 608. Interpretation
‘‘In interpreting this chapter, the court shall consider
its international origin, and the need to promote an appli-
cation of this chapter that is consistent with the applica-
tion of similar statutes adopted by foreign jurisdictions.
178
‘‘SUBCHAPTER II—ACCESS OF FOREIGN REP-
RESENTATIVES AND CREDITORS TO THE
COURT
‘‘§ 609. Right of direct access
‘‘(a) A foreign representative is entitled to commence
a case under section 604 by filing a petition for recogni-
tion under section 615, and upon recognition, to apply di-
rectly to other Federal and State courts for appropriate
relief in those courts.
‘‘(b) Upon recognition, and subject to section 610,
a foreign representative has the capacity to sue and be
sued, and shall be subject to the laws of the United States
of general applicability.
‘‘(c) Subject to section 610 of this title, a foreign rep-
resentative is subject to laws of general application.
‘‘(d) Recognition under this chapter is prerequisite to
the granting of comity or cooperation to a foreign rep-
resentative in any State or Federal court in the United
States. Any request for comity or cooperation by a foreign
representative in any court shall be accompanied by a
sworn statement setting forth whether recognition under
section 615 has been sought and the status of any such
petition.
‘‘(e) Upon denial of recognition under this chapter,
the court may issue appropriate orders necessary to pre-
179
vent an attempt to obtain comity or cooperation from
courts in the United States without such recognition.
‘‘§ 610. Limited jurisdiction
‘‘The sole fact that a foreign representative files a
petition under section 615 does not subject the foreign
representative to the jurisdiction of any court in the
United States for any other purpose.
‘‘§ 611. Commencement of case under section 301 or
303
‘‘(a) Upon recognition, a foreign representative may
commence—
‘‘(1) an involuntary case under section 303; or
‘‘(2) a voluntary case under section 301 or 302,
if the foreign proceeding is a foreign main proceed-
ing.
‘‘(b) The petition commencing a case under sub-
section (a) of this section must be accompanied by a state-
ment describing the petition for recognition and its cur-
rent status. The court where the petition for recognition
has been filed must be advised of the foreign representa-
tive’s intent to commence a case under subsection (a) of
this section prior to such commencement.
180
‘‘§ 612. Participation of a foreign representative in a
case under this title
‘‘Upon recognition of a foreign proceeding, the for-
eign representative in that proceeding is entitled to par-
ticipate as a party in interest in a case regarding the debt-
or under this title.
‘‘§ 613. Access of foreign creditors to a case under
this title
‘‘(a) Foreign creditors have the same rights regarding
the commencement of, and participation in, a case under
this title as domestic creditors.
‘‘(b)(1) Subsection (a) of this section does not change
or codify present law as to the priority of claims under
section 507 or 726 of this title, except that the claim of
a foreign creditor under those sections shall not be given
a lower priority than that of general unsecured claims
without priority solely because the holder of such claim
is a foreign creditor.
‘‘(2)(A) Subsection (a) of this section and paragraph
(1) of this subsection do not change or codify present law
as to the allowability of foreign revenue claims or other
foreign public law claims in a proceeding under this title.
‘‘(B) Allowance and priority as to a foreign tax claim
or other foreign public law claim shall be governed by any
applicable tax treaty of the United States, under the con-
ditions and circumstances specified therein.
181
‘‘§ 614. Notification to foreign creditors concerning a
case under this title
‘‘(a) Whenever in a case under this title notice is to
be given to creditors generally or to any class or category
of creditors, such notice shall also be given to the known
creditors generally, or to creditors in the notified class or
category, that do not have addresses in the United States.
The court may order that appropriate steps be taken with
a view to notifying any creditor whose address is not yet
known.
‘‘(b) Such notification to creditors with foreign ad-
dresses described in subsection (a) shall be given individ-
ually, unless the court considers that, under the cir-
cumstances, some other form of notification would be
more appropriate. No letters rogatory or other similar for-
mality is required.
‘‘(c) When a notification of commencement of a case
is to be given to foreign creditors, the notification shall—
‘‘(1) indicate the time period for filing proofs of
claim and specify the place for their filing;
‘‘(2) indicate whether secured creditors need to
file their proofs of claim; and
‘‘(3) contain any other information required to
be included in such a notification to creditors pursu-
ant to this title and the orders of the court.
182
‘‘(d) Any rule of procedure or order of the court as
to notice or the filing of a claim shall provide such addi-
tional time to creditors with foreign addresses as is rea-
sonable under the circumstances.
‘‘SUBCHAPTER III—RECOGNITION OF A
FOREIGN PROCEEDING AND RELIEF
‘‘§ 615. Application for recognition of a foreign pro-
ceeding
‘‘(a) A foreign representative applies to the court for
recognition of the foreign proceeding in which the foreign
representative has been appointed by filing a petition for
recognition.
‘‘(b) A petition for recognition shall be accompanied
by—
‘‘(1) a certified copy of the decision commenc-
ing the foreign proceeding and appointing the for-
eign representative;
‘‘(2) a certificate from the foreign court affirm-
ing the existence of the foreign proceeding and of
the appointment of the foreign representative; or
‘‘(3) in the absence of evidence referred to in
paragraphs (1) and (2), any other evidence accept-
able to the court of the existence of the foreign pro-
ceeding and of the appointment of the foreign rep-
resentative.
185
that the grounds for granting it were fully or partially
lacking or have ceased to exist, but in considering such
action the court shall give due weight to possible prejudice
to parties that have relied upon the granting of recogni-
tion. The case under this chapter may be closed in the
manner prescribed for a case under section 350.
‘‘§ 618. Subsequent information
‘‘From the time of filing the petition for recognition
of the foreign proceeding, the foreign representative shall
file with the court promptly a notice of change of status
concerning—
‘‘(1) any substantial change in the status of the
foreign proceeding or the status of the foreign rep-
resentative’s appointment; and
‘‘(2) any other foreign proceeding regarding the
debtor that becomes known to the foreign represent-
ative.
‘‘§ 619. Relief that may be granted upon petition for
recognition of a foreign proceeding
‘‘(a) From the time of filing a petition for recognition
until the petition is decided upon, the court may, at the
request of the foreign representative, where relief is ur-
gently needed to protect the assets of the debtor or the
interests of the creditors, grant relief of a provisional na-
ture, including—
186
‘‘(1) staying execution against the debtor’s as-
sets;
‘‘(2) entrusting the administration or realiza-
tion of all or part of the debtor’s assets located in
the United States to the foreign representative or
another person authorized by the court, including an
examiner, in order to protect and preserve the value
of assets that, by their nature or because of other
circumstances, are perishable, susceptible to devalu-
ation or otherwise in jeopardy; and
‘‘(3) any relief referred to in paragraph (3),
(4), or (7) of section 621(a).
‘‘(b) Unless extended under section 621(a)(6), the re-
lief granted under this section terminates when the peti-
tion for recognition is decided upon.
‘‘(c) It is a ground for denial of relief under this sec-
tion that such relief would interfere with the administra-
tion of a foreign main proceeding.
‘‘(d) The court may not enjoin a police or regulatory
act of a governmental unit, including a criminal action or
proceeding, under this section.
‘‘(e) The standards, procedures, and limitations ap-
plicable to an injunction shall apply to relief under this
section.
187
‘‘§ 620. Effects of recognition of a foreign main pro-
ceeding
‘‘(a) Upon recognition of a foreign proceeding that
is a foreign main proceeding—
‘‘(1) section 362 applies with respect to the
debtor and that property of the debtor that is within
the territorial jurisdiction of the United States; and
‘‘(2) transfer, encumbrance, or any other dis-
position of an interest of the debtor in property
within the territorial jurisdiction of the United
States is restrained as and to the extent that is pro-
vided for property of an estate under sections 363,
549, and 552.
Unless the court orders otherwise, the foreign representa-
tive may operate the debtor’s business and may exercise
the powers of a trustee under section 549, subject to sec-
tions 363 and 552.
‘‘(b) The scope, and the modification or termination,
of the stay and restraints referred to in subsection (a) of
this section are subject to the exceptions and limitations
provided in subsections (b), (c), and (d) of section 362,
subsections (b) and (c) of section 363, and sections 552,
555 through 557, 559, and 560.
‘‘(c) Subsection (a) of this section does not affect the
right to commence individual actions or proceedings in a
188
foreign country to the extent necessary to preserve a claim
against the debtor.
‘‘(d) Subsection (a) of this section does not affect the
right of a foreign representative or an entity to file a peti-
tion commencing a case under this title or the right of
any party to file claims or take other proper actions in
such a case.
‘‘§ 621. Relief that may be granted upon recognition
of a foreign proceeding
‘‘(a) Upon recognition of a foreign proceeding, wheth-
er main or nonmain, where necessary to effectuate the
purpose of this chapter and to protect the assets of the
debtor or the interests of the creditors, the court may, at
the request of the foreign representative, grant any appro-
priate relief, including—
‘‘(1) staying the commencement or continuation
of individual actions or individual proceedings con-
cerning the debtor’s assets, rights, obligations or li-
abilities to the extent they have not been stayed
under section 620(a);
‘‘(2) staying execution against the debtor’s as-
sets to the extent it has not been stayed under sec-
tion 620(a);
‘‘(3) suspending the right to transfer, encumber
or otherwise dispose of any assets of the debtor to
189
the extent this right has not been suspended under
section 620(a);
‘‘(4) providing for the examination of witnesses,
the taking of evidence or the delivery of information
concerning the debtor’s assets, affairs, rights, obliga-
tions or liabilities;
‘‘(5) entrusting the administration or realiza-
tion of all or part of the debtor’s assets within the
territorial jurisdiction of the United States to the
foreign representative or another person, including
an examiner, authorized by the court;
‘‘(6) extending relief granted under section
619(a); and
‘‘(7) granting any additional relief that may be
available to a trustee, except for relief available
under sections 522, 544, 545, 547, 548, 550, and
724(a).
‘‘(b) Upon recognition of a foreign proceeding, wheth-
er main or nonmain, the court may, at the request of the
foreign representative, entrust the distribution of all or
part of the debtor’s assets located in the United States
to the foreign representative or another person, including
an examiner, authorized by the court, provided that the
court is satisfied that the interests of creditors in the
United States are sufficiently protected.
190
‘‘(c) In granting relief under this section to a rep-
resentative of a foreign nonmain proceeding, the court
must be satisfied that the relief relates to assets that,
under the law of the United States, should be adminis-
tered in the foreign nonmain proceeding or concerns infor-
mation required in that proceeding.
‘‘(d) The court may not enjoin a police or regulatory
act of a governmental unit, including a criminal action or
proceeding, under this section.
‘‘(e) The standards, procedures, and limitations ap-
plicable to an injunction shall apply to relief under para-
graphs (1), (2), (3), and (6) of subsection (a).
‘‘§ 622. Protection of creditors and other interested
persons
‘‘(a) The court may grant relief under section 619
or 621, or may modify or terminate relief under subsection
(c) of this section, only if the interests of the creditors
and other interested persons or entities, including the
debtor, are sufficiently protected.
‘‘(b) The court may subject relief granted under sec-
tion 619 or 621, or the operation of the debtor’s business
under section 620(a)(2) of this title, to conditions it con-
siders appropriate, including the giving of security or the
filing of a bond.
191
‘‘(c) The court may, at the request of the foreign rep-
resentative or an entity affected by relief granted under
section 619 or 621, or at its own motion, modify or termi-
nate such relief.
‘‘(d) Section 1104(d) shall apply to the appointment
of an examiner under this chapter. Any examiner shall
comply with the qualification requirements imposed on a
trustee by section 322.
‘‘§ 623. Actions to avoid acts detrimental to creditors
‘‘(a) Upon recognition of a foreign proceeding, the
foreign representative has standing in a pending case
under another chapter of this title to initiate actions under
sections 522, 544, 545, 547, 548, 550, and 724(a).
‘‘(b) When the foreign proceeding is a foreign
nonmain proceeding, the court must be satisfied that an
action under subsection (a) of this section relates to assets
that, under United States law, should be administered in
the foreign nonmain proceeding.
‘‘§ 624. Intervention by a foreign representative
‘‘Upon recognition of a foreign proceeding, the for-
eign representative may intervene in any proceedings in
a State or Federal court in the United States in which
the debtor is a party.