§1501 Purpose and Scope of Application

Summary

Adopts the Model Law on Cross-Border Insolvency to give U.S. courts tools to handle bankruptcies that cross national borders. It has five main goals: get U.S. and foreign courts and officials to work together; make trade and investment more certain; run cross-border cases fairly and efficiently for all creditors and the debtor; protect and raise the value of the debtor’s assets; and help save troubled businesses to protect investments and jobs. Applies when a foreign court or representative asks the U.S. for help, when help is asked abroad for a U.S. case, when U.S. and foreign cases run at the same time, or when foreign creditors want to start or join a U.S. case. It does not apply to entities excluded under section 109(b) (except foreign insurance companies), to individuals with debts within the limits in section 109(e) who are U.S. citizens or lawful permanent residents, or to entities under the Securities Investor Protection Act of 1970, certain stockbrokers (chapter 7, subchapter III), or certain commodity brokers (chapter 7, subchapter IV). A court may not use this law to touch deposits, escrows, trust funds, or other security that state insurance law requires for the benefit of U.S. claim holders.