Section 350 - Closing and reopening cases

3 Analyses of this statute by attorneys

  1. Foreign Representative's Failure to Communicate with Bankruptcy Court Warrants Closure of Chapter 15 Case

    Jones DayDan MossMarch 31, 2023

    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).An "establishment" is defined by section 1502(2) as "any place of operations where the debtor carries out a nontransitory economic activity." Unlike with the determination of COMI, there is no statutory presumption regarding the determination of whether a foreign debtor has an establishment in any particular location. See In re British Am. Ins. Co., 425 B.R. 884, 915 (Bankr. S.D. Fla. 2010).After filing a petition for chapter 15 recognition, a foreign representative is obligated to notify the bankruptcy court promptly of, among other things, "any substantial change in the status of such foreign proceeding or the status of the foreign representative's appointment." 11 U.S.C. § 1518.Section 1517(d) provides that the court may close a chapter 15 case in the manner specified in section 350 of the Bankruptcy Code. In short, section 350 requires a case to be closed "[a]fter an estate is fully administered." Rule 5009(c) of the Federal Rules of Bankruptcy Procedure sets forth the requirements for closing a chapter 15 case after the foreign representative has filed a final report detailing the results of his or her activities and stating that the case has been fully administered.Following chapter 15 recognition of a foreign proceeding, the court may dismiss or suspend all proceedings in the chapter 15 case if the interests of creditors and the debtor would be best served by such relief or "the purposes of chapter 15 … would be best served by such dismissal or suspension." 11 U.S.C. § 305(a); see also 11 U.S.C. § 1529(4) (authorizing a bankruptcy court, in attempting to coordinate a chapter 15 case or a foreign proceeding with a case filed under another chapter of the Bankruptcy Code, to "grant any of the relief authorized under section 305."To promote comity and cooperation among courts presiding

  2. Bright-Line Rule: No Modification of Substantially Consummated Chapter 11 Plan

    Jones DayMay 25, 2022

    The first-lien, second-lien, and general unsecured classes of creditors all voted to accept the plan.On October 7, 2021—long after NEG's chapter 11 plan was substantially consummated and the bankruptcy case was closed—NEG (now owned by the first-lien creditors) filed a motion to reopen the case (as permitted under section 350 of the Bankruptcy Code and Bankruptcy Rule 5010) for the purpose of "reconsidering" the allowed amount of the first-lien claims under section 502(j) of the Bankruptcy Code, which provides in part that "[a] claim that has been allowed or disallowed may be reconsidered for cause." Specifically, NEG sought an order: (i) bifurcating the first-lien claims into secured claims in the amount of $475 million and deficiency claims for the balance of the allowed $539 million amount; and (ii) increasing the amount of the reinstated first-lien debt from $200 million to $475 million.According to NEG, the "only impact of the relief … would be to reallocate how the proceeds from a disposition of the assets are allocated as between the bank's reinstated secured debt and its 100 percent equity stake."

  3. How Long Is Too Long To Reopen A Bankruptcy Case?

    Tucker Arensberg, P.C.Judith FitzgeraldNovember 5, 2015

    Scheib, 2015 WL 6685714, at *1. The Court of Appeals noted that, although 11 U.S.C. § 350 authorizes a bankruptcy case to be reopened to administer assets and for other purposes, the debtor’s purpose in attempting to reopen this bankruptcy was more appropriately addressed to the state court which adjudicated the foreclosure. Citing to an earlier opinion, In re Lazy Days’ RV Center Inc., 724 F.3d 418, 421 (3d Cir.2013), the Court wrote: “We have stated that bankruptcy courts should determine whether proceedings are pending in state court and which forum—state court or bankruptcy court—is most appropriate to adjudicate issues raised by a motion to reopen.”