Chapter 15 of the U.S. Bankruptcy Code, 11 U.S.C. Â§Â§ 1501-1532, was enacted pursuant to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). It was designed to facilitate cooperation between U.S. and foreign courts and to clarify administration of three types of international insolvency proceedings: (1) full or "main" bankruptcy proceedings, commenced either in the U.S. with cooperation sought from foreign courts or vice versa; (2) ancillary proceedings, such as limited requests to administer specific assets under U.S. jurisdiction; and (3) requests to suspend or dismiss U.S. proceedings so as to avoid conflicts with foreign proceedings already in progress. Provisions addressing these situations in current law first appeared in the Bankruptcy Reform Act of 1978 and were codified primarily at 11 U.S.C. Â§Â§ 303-306. In response to practitioner requests for greater multilateral cooperation, from 1994 to 1997 the United Nations Commission on International Trade Law (UNCITRAL) developed a Model Law on Cross-Border Insolvency (Model Law). The BAPCPA implemented the Model Law by adding chapter 15 to the Code. Chapter 15 replaced 11 U.S.C. Â§ 304, which was repealed; modified 11 U.S.C. Â§Â§ 303, 305, and 306; and addressed other concerns. This report summarizes the evolution and content of chapter 15. All international insolvency cases possess a tension between the: (1) principal objective of the insolvency proceeding, which is to preserve the maximum value of the debtor's assets wherever those assets are located, and (2) jurisdictional reach of a state or nation's enforcement powers, which is limited to territorial borders. Cooperation between courts of different jurisdictions is essential to efficiently identify, preserve, manage, and allocate the debtor's dispersed assets. Such cooperation between courts is called "comity" or "reciprocity" and may be procedural or substantive in form. Comity is the voluntary consideration of laws or judicial decisions made in another jurisdiction. Reciprocity is the recognition and enforcement of laws, privileges, or judicial decisions made in another jurisdiction. In cross-border insolvency proceedings, procedural cooperation can give the foreign creditor or trustee: (1) the right to appear and request that the host court declare a debtor insolvent, (2) the ability to enforce a foreign court order for turnover of assets in the host jurisdiction, and (3) assurance that the assets within the host jurisdiction will be preserved until a final ruling is issued. Procedural cooperation also involves communication (e.g., notifying creditors of proceedings and deadlines, exchanging transcripts and documentation, updating other courts with new information, overseeing administration of reorganization or liquidation plans). Substantive cooperation has been the principal obstacle for foreign creditors and trustees who may find their claims unrecognized by the host court or subordinated to those of domestic parties in interest. U.S. creditors and trustees encountered such problems abroad. Likewise, foreign creditors and trustees found their claims against a debtor's assets impacted by U.S. state statutesâdepending on the nature of the claim (e.g., wages, mortgages) or by its timing (e.g., local parties in interest usually were the first to file their claims)ârather than participating in a single pro rata distribution among all parties who filed claims by a set deadline. In the late 19 th and early 20 th centuries, several nations entered into bankruptcy treaties or held international conferences in order to facilitate the handling of concurrent bankruptcies in multiple jurisdictions. The U.S. did not enter into these treaties, opting instead to maximize judicial discretion for the relatively few international insolvency cases that U.S. courts encountered. This ad hoc system existed until three high-profile cases in the mid-1970s gave impetus to the 1978 reforms regarding international insolvency. The discussion below summarizes the developments from the mid-1970s through 2005 that led to the enactment of chapter 15. Three high-profile cases gave impetus to the enactment of 11 U.S.C. Â§Â§ 303-306 in 1978. These cases involved foreign banks that were declared insolvent abroad but held assets in the U.S. Prior to 1978, "[f]oreign banks desiring to establish a direct U.S. presence obtained state licenses" and fell under separate rules for insolvent banks. However, none of the three banks (Herstatt, IBB, or Finabank ) had a direct presence in the U.S. None had an office or had done business in the U.S.; they only had accounts with major U.S. banks in order to settle foreign exchange contracts. Were the three entities banks or corporations under U.S. law? Confusion arose because the foreign banks' structure did not clearly correspond to U.S. forms of business organization (e.g., corporation, partnership). The central issue in all three cases was whether the foreign bank was covered by or exempt from the predecessor to the 1978 Bankruptcy Code, the Bankruptcy Act of 1898. If the banks were subject to the 1898 Act, then they would be entitled to file a petition for voluntary bankruptcy, just like any other corporation, and benefit from the fact that certain claims made against their assets within four months prior to filing would be voidable preferences under U.S. law. Voiding transactions made within four months prior to the debtor's filing was intended to promote equity among all creditors, rather than favoring those creditors who first sensed that the debtor was going to declare bankruptcy. The 1898 Act, as amended, was silent regarding Congress' intended coverage of foreign banks. If the foreign banks were "banking corporations" under U.S. law, then they would be exempt from coverage under the 1898 Act and would be subject to the separate regime for insolvent banks. If the banks were simply foreign corporations, akin to a partnership, then they would be eligible to file a petition under the bankruptcy law. Major U.S. banks attached claims to the foreign banks' U.S. accounts, arguing that the foreign banks were banking corporations, ineligible to file for bankruptcy. The three foreign banks tried to have the U.S. attachments voided and the funds turned over to their respective liquidators, each of whom had been appointed by a non-U.S. court. If the U.S. banks prevailed, their claims would have been satisfied in full, outside of bankruptcy, in the order in which their attachments had been madeâuntil the foreign banks' assets were exhausted. If the foreign banks prevailed, then all of the U.S. banks would be required to participate in the foreign liquidation plan in which creditors would receive pro rata distribution, most likely partial recoupment or "pennies on the dollar." Decisions by the Southern District Court for New York and the U.S. Court of Appeals for the Second Circuit regarding this central issue, and others, would inform Â§Â§ 303-306. The American and German parties in Herstatt settled, but the Second Circuit issued decisions in IBB and Finabank to (1) assert the 1898 Act's coverage over foreign banks holding assets, but not doing business, in the U.S., and (2) set a tone of comity, if not reciprocity, in concurrent international insolvency proceedings. In IBB , the Second Circuit viewed its role "to be in aid of the order of the High Court [of England]." In Finabank , the Second Circuit acknowledged the pending Swiss proceeding and noted the Swiss proceeding's stated objective to ensure an equitable outcome for all of Finabank's creditors. Congress incorporated these criteriaâthe Second Circuit's sense of comity and assurance of protection of U.S. creditorsâin Â§ 304 of the Bankruptcy Reform Act of 1978. In IBB , the English Receiver and Provisional Liquidator filed the voluntary bankruptcy petition in New York with the express intention of preserving IBB's U.S. assets for distribution among all of the bank's creditors. The Second Circuit not only relied on the High Court's order appointing New York counsel to file the petition, but also on the reciprocity that would exist if the situations were reversed. Under English law, an English court could void attachments made within six months prior to a petition for "winding up." The Second Circuit reversed the lower courts' dismissal of Finabank's chapter 11 petition and remanded the case to the bankruptcy court. Finabank had filed the U.S. petition while a Swiss proceeding determined Finabank's prospects for rehabilitation. (A Swiss court ultimately ordered Finabank to be liquidated. ) The petition was incomplete because Swiss banking law prohibited Finabank from revealing the names and addresses of depositors and creditors. The Second Circuit held that Finabank's filing of the chapter 11 petition in order to frustrate the U.S. creditors' attachments was insufficient to prove that Finabank did not truly intend to seek rehabilitation, but failure to file a complete list of creditors was fatal because that requirement had never been waived for any debtor. "Flexibility in the international context of course should not come at the expense of the orderly administration of the [Bankruptcy] Act." Nevertheless, the Second Circuit acknowledged that Finabank was atypical and opened the door to two options upon remand: (1) permitting assets in the U.S. to be administered by a Swiss proceeding, or (2) coordinating a full proceeding in the U.S. with a Swiss court. By the conclusion of these three cases in 1977, additional cross-border insolvency cases involving non-banks and complicated fact patterns were emerging. The circumstances were ripe for Congress to clarify procedures for administering cross-border insolvency cases.