U.S. Bankruptcy Court Denies Chapter 15 Recognition Of Maltese Liquidation Absent Evidence Of Meaningful Activities Supporting Finding Of COMI Or Establishment In Malta

• Published date: 24 February 2026
• Subject Matter: Corporate/Commercial Law, Insolvency/Bankruptcy/Re-Structuring, Financial Restructuring, Corporate and Company Law, Insolvency/Bankruptcy
• Law Firm: Jones Day
• Author: Ms Corinne Ball, Dan Moss, David S. Torborg and Isel Perez

Having reached its 20th anniversary of enactment, chapter 15 of the Bankruptcy Code has proven to be an invaluable tool in assisting foreign debtors, their duly-appointed representatives, and foreign bankruptcy courts to, among other things, preserve the debtor's U.S. assets, enforce the terms of foreign restructuring plans in the United States, and otherwise provide assistance in support of foreign bankruptcy proceedings. Although "recognition" of foreign bankruptcy proceedings in the United States as a matter of international comity has become almost routine since chapter 15 came into force in 2005, such recognition depends on satisfaction of the Bankruptcy Code's eligibility requirements. One of those requirements for chapter 15 recognition of a foreign bankruptcy case by a U.S. bankruptcy court is that the foreign debtor must have either a "center of main interests" ("COMI") or an "establishment" in the country where the debtor's bankruptcy proceeding is pending.

The U.S. Bankruptcy Court for the Southern District of Texas recently addressed this issue in In re Geden Holdings, Ltd., No. 25-90138, 2025 WL 2484883 (Bankr. S.D. Tex. Aug. 28, 2025). The court ruled that, although the debtor may have had a COMI or an establishment in Malta when a liquidation proceeding was commenced for it in a Maltese court in 2017, the absence of any meaningful activity by the debtor's liquidator from that time until the liquidator filed a chapter 15 petition in the United States more than five years later meant that the debtor had neither a COMI nor an establishment in Malta on the chapter 15 petition date. The court accordingly denied the petition for recognition.

Procedures and Recognition Under Chapter 15

Chapter 15 was enacted in 2005 to govern cross-border bankruptcy and insolvency proceedings. It is patterned on the 1997 UNCITRAL Model Law on Cross-Border Insolvency, which has been enacted in some form by more than 50 countries.

Under section 1515 of the Bankruptcy Code, the "foreign representative" of a non-U.S. debtor may file a petition in a U.S. bankruptcy court seeking "recognition" of a "foreign proceeding." Section 101(24) of the Bankruptcy Code defines "foreign representative" as "a person or body, including a person or body appointed on an interim basis, authorized in a foreign proceeding to administer the reorganization or the liquidation of the debtor's assets or affairs or to act as a representative of such foreign proceeding."

"Foreign proceeding" is defined in section 101(23) of the Bankruptcy Code as:

[A] collective judicial or administrative proceeding in a foreign country, including an interim proceeding, under a law relating to insolvency or adjustment of debt in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganization or liquidation.

More than one bankruptcy or insolvency proceeding may be pending with respect to the same foreign debtor in different countries. Chapter 15 therefore contemplates recognition in the United States of both a foreign "main" proceeding'a case pending in the country where the debtor's COMI is located (see 11 U.S.C. ' 1502(4))'and foreign "nonmain" proceedings, which may be pending in countries where the debtor merely has an "establishment" (see 11 U.S.C. ' 1502(5)). A debtor's COMI is presumed to be the location of the debtor's registered office, or "habitual residence" in the case of an individual. See 11 U.S.C. ' 1516(c). However, this presumption can be overcome.

Although the COMI presumption can be relied on in "easy cases," the presumption should not be relied upon in cases involving a substantial dispute regarding the issue. See In re Creative Finance Ltd. (In Liquidation), 543 B.R. 498, 517 (Bankr. S.D.N.Y. 2016); In re SPhinX, Ltd., 351 B.R. 103, 112 (Bankr. S.D.N.Y. 2006), aff'd, 371 B.R. 10 (S.D.N.Y. 2007); see also In re Iovate Health Sciences International Inc., 673 B.R. 516, 530 (Bankr. S.D.N.Y. 2025) (discussing factors considered by courts in determining whether the COMI presumption can be overcome). And, "[e]ven in the absence of an objection, courts must undertake their own jurisdictional analysis and grant or deny recognition under Chapter 15 as the facts of each case warrant." Lavie v. Ran (In re Ran), 607 F.3d 1017, 1021 (5th Cir. 2010).

Various factors have been deemed relevant by courts in determining a debtor's COMI, including the physical location of the debtor's headquarters, managers, employees, investors, primary assets, and creditors, as well as the jurisdiction whose law would apply to most of the debtor's disputes. See SPhinX, 351 B.R. at 117-18. In addition, courts have considered any relevant activities leading up to the chapter 15 filing, including liquidation or reorganization activities and administrative functions. See Morning Mist Holdings Ltd. v. Krys (In re Fairfield Sentry Ltd.), 714 F.3d 127 (2d Cir. 2013). Such activities can entail the negotiation or execution of a restructuring support agreement with creditors, creditor meetings, liquidation activities (including court hearings), or administrative functions. See, e.g., In re Oi Brasil Holdings Co'peratief U.A., 578 B.R. 169, 222 (Bankr. S.D.N.Y. 2017) (citing Creative Finance, 543 B.R. at 517; In re Modern Land (China) Co., 641 B.R. 768, 778-81, 789-90 (Bankr. S.D.N.Y. 2022)). In addition, where the debtor is an entity with limited operations, it may be the case that restructuring activities performed outside the United States constitute the debtor's primary business activity prior to the filing of the chapter 15 petition.

Courts may also consider the situs of each debtor entity's "nerve center," including the location from which such entity's "activities are directed and controlled, in determining a debtor's COMI." Fairfield Sentry, 714 F.3d at 138. "[R]egularity and ascertainability" by creditors are also important factors in the COMI analysis. Id.; In re British Am. Ins. Co., 425 B.R. 884, 912 (Bankr. S.D. Fla. 2010) ("The location of a debtor's COMI should be readily ascertainable by third parties."); In re Betcorp Ltd., 400 B.R. 266, 289 (Bankr. D. Nev. 2009) (looking to the whether COMI is ascertainable by creditors). Creditors' expectations regarding the location of a debtor's COMI are also relevant. See In re Serviços de Petróleo Constellation S.A., 613 B.R. 497 (Bankr...