Judicial comments cast doubt on the ability to compromise US law-governed debt effectively based on Chapter 15 recognition alone.

By Bruce Bell, Adam J. Goldberg, Howard Lam, Flora Innes, and Tim Bennett

A recent first instance decision in Hong Kong has highlighted an important conflict-of-laws issue that will inform where debtor groups with a Hong Kong presence choose to promote a restructuring. Re Rare Earth[1] relied on the rule in Gibbs to cast doubt on the ability of an offshore scheme of arrangement to compromise New York law-governed debt.