By Steven W. Golden and Brooke E. Wilson (Pachulski Stang Ziehl & Jones LLP)
Editor’s Note: Steven and Brooke’s article was published in the American Bankruptcy Institute (ABI) Journal (August 2025).
Chapter 15 requires U.S. bankruptcy courts to recognize a foreign proceeding as a “foreign main proceeding” when it is pending in the country where the debtor has its “center of main interests” (COMI), thus, triggering powerful relief. Because some foreign regimes offer tools unavailable under chapter 11, companies may be incentivized to manufacture a COMI abroad – i.e., participate in “COMI manipulation.”
The article centers on In re Mega Newco (Bankr. S.D.N.Y. Feb. 2025), where Judge Michael Wiles confronted exactly this scenario. The article examines In re Mega Newco, Judge Wiles’ concerns with recognizing Mega Newco’s English scheme of arrangement as a foreign main proceeding, and Judge Wiles’ ultimate decision. The authors also comment on whether COMI manipulation is becoming a problem and predict what such tactics will mean for U.S. courts.
Click here to read the full article.