By R. Adam Swick, Chair, International Insolvency and Partner, Bankruptcy and Reorganization, Akerman LLP

I. Introduction

Chapter 15 of the U.S. Bankruptcy Code was designed to facilitate coordination between U.S. and foreign insolvency proceedings. Originally thought of as providing simple ancillary relief—stay protection, asset preservation, information sharing—in support of a foreign main proceeding, recent decisions have demonstrated that Chapter 15 can be an effective tool for delivering outcomes categorically unavailable in domestic U.S. bankruptcy proceedings.

II. Chapter 15's Statutory Tools

Section 1521(a)(7) allows a court to grant "any additional relief available to a trustee."¹ Courts have described this language as "exceedingly broad."² Further, section 1507 empowers courts to provide "additional assistance" consistent with comity. "Additional assistance" is an expansive term in its own right, but it also suggests that even if a court cannot grant relief under section 1521(a)(7), it may under section 1507."³ Consequently, section 1507 implies an even broader grant of power than section 1521(a)(7).⁴

These provisions do have narrow limitations. First, section 1506 provides that nothing in Chapter 15 stops a court from refusing to act if the requested relief is "manifestly contrary to U.S. public policy." But this section is "narrowly interpreted, as the word 'manifestly' in international usage restricts the public policy exception to the most fundamental policies in the United States."⁵ Refusal to take an action under section 1506 is an "extraordinary act" that "rarely is exercised."⁶

Second, section 1522(a) permits a court to grant relief under section 1521 only if the interests of creditors, the debtor, and other interested entities are "sufficiently protected." "'Sufficient protection' embodies three basic principles: the just treatment of all holders of claims against the bankruptcy estate, the protection of U.S. claimants against prejudice and inconvenience in the processing of claims in the foreign proceeding, and the distribution of proceeds of the foreign estate substantially in accordance with the order prescribed by U.S. law."⁷

III. Recent Ways Chapter 15's Flexibility Has Been Utilized

Utilizing sections 1507 and 1521, recent U.S. decisions have recognized and/or enforced foreign laws or orders providing relief not available in a Chapter 7 or 11: (1) nonconsensual third-party releases (barred by the U.S. Supreme Court); (2) reverse vesting orders ("RVOs") (no similar U.S. statutory analog); (3) bankruptcy protection for cannabis enterprises excluded from Chapter 11 (excluded by federal law); and (4) single-class debt restructurings through foreign schemes of arrangement (not available under the U.S. Bankruptcy Code).

A. Nonconsensual Third-Party Releases

In Harrington v. Purdue Pharma L.P., 603 U.S. 204 (2024), the U.S. Supreme Court held that the Bankruptcy Code does not authorize nonconsensual releases of claims against non-debtors in Chapter 11 cases, grounding its analysis in the textual limitations of sections 1123(b) and 1141(d). Those provisions, however, are specific to Chapter 11 plans and do not operate in Chapter 15. Two post-Purdue decisions have confirmed this structural distinction.

In In re Crédito Real, the debtor sought recognition of a Mexican plan containing nonconsensual third-party releases.⁸ The U.S. International Development Finance Corporation objected, arguing that Purdue foreclosed the relief and that enforcement would be "manifestly contrary" to public policy under section 1506.⁹ The court rejected all arguments, holding that section 1521(a)(7) provides broader authority than section 1123(b)(6) and that section 1506 must be applied narrowly.¹⁰

In In re Odebrecht Engenharia e Construção S.A., 669 B.R. 457 (Bankr. S.D.N.Y. 2025), the court confronted a different posture. The Brazilian recuperação judicial plan did not explicitly frame its provisions as "releases"; rather, the U.S. Trustee argued that the proposed recognition order itself contained release-like exculpations and injunctions.¹¹ The court held that there was no material difference between enforcing a foreign plan with releases and entering a recognition order containing them—both result in a U.S. order releasing claims against non-debtors. Assuming without deciding that the order functioned as nonconsensual releases, the court held them permissible under sections 1521(a) and 1507.¹²

The Odebrecht court also explained that a "battery of…cases makes it clear that a party can lose rights in an ancillary proceeding [that] it otherwise would have had in a plenary case under the Bankruptcy Code."¹³ Accordingly, "deference to a foreign court is appropriate [as]long as the foreign proceedings are procedurally fair and…do not contravene the laws or public policy of the United States." If these requirements are met, bankruptcy courts may "extinguish claims that would be available in plenary actions in the U.S. in the name of comity."¹⁴

Together, these decisions establish the doctrinal framework: Purdue's holding rests on sections 1123(b) and 1141(d)—provisions that do not govern Chapter 15. Sections 1521(a)(7) and 1507 provide independent and broader authority. The comity-based framework of Chapter 15 permits recognition of releases ordered by foreign courts, subject only to section 1506's narrow public-policy floor.

B. Reverse Vesting Orders

An RVO is a Canadian restructuring mechanism with no parallel in the U.S. Bankruptcy Code. In a traditional section 363 sale, the debtor transfers desirable assets out to a purchaser free and clear of liens, and liabilities remain with the estate. An RVO works in the opposite direction: the debtor cancels existing equity, issues new shares to the purchaser, and "vests out" excluded assets, contracts, and liabilities into a newly formed residual company. The cleansed entity continues under new ownership, retaining non-transferable permits, licenses, tax attributes, and contractual relationships that a section 363 sale would destroy.

In In re Iovate Health Sciences Int'l Inc., No. 25-11958 (MG), 2026 WL 1295907 (Bankr. S.D.N.Y. May 12, 2026), Chief Judge Glenn issued a 27-page memorandum opinion providing a detailed published analysis of RVO enforcement in the Second Circuit.¹⁵ The Ontario Superior Court had approved an RVO for the Iovate Group after a court-supervised sale process.¹⁶ The RVO was necessitated by non-transferable Canadian import licenses, $114 million in carry-forward tax losses retainable only by the existing entity, and hundreds of contracts that could not be individually assigned.¹⁷ A section 363 sale would have destroyed each of these assets.

Chief Judge Glenn refused to subject the transaction to section 363 review, finding that cancelling existing shares and issuing new ones is not a "sale" or "transfer" of debtor's property under section 1520(a)(2). ¹⁸ Instead, the court enforced the RVO under section 1521(a)(7), describing that provision's discretion as "exceedingly broad" and exercising it consistent with comity principles.

C. Cannabis Restructuring

Cannabis companies are categorically barred from Chapters 7 and 11 of the U.S. Bankruptcy Code. Because marijuana remains a Schedule I controlled substance under the federal Controlled Substances Act ("CSA"), U.S. courts have routinely dismissed cannabis-related bankruptcy filings—a court cannot be asked to administer assets connected to federally prohibited activity. This categorical bar has left an entire industry without access to the orderly restructuring mechanisms available to every other sector of the economy.

In In re The Cannabist Company Holdings Inc., No. 26-10426 (BLS) (Bankr. D. Del. May 9, 2026), the court recognized a foreign proceeding involving a cannabis-related enterprise. The Cannabist Company Holdings—a Canadian holding company publicly traded on Cboe Canada and ultimate parent of subsidiaries operating cannabis businesses in eight U.S. states that grew marijuana—filed under the Companies' Creditors Arrangement Act in Ontario on March 24, 2026, and commenced Chapter 15 proceedings in Delaware the following day.

A secured creditor initially objected under section 1506, arguing recognition would facilitate illegal conduct in violation of the CSA. Nonetheless, the objection was resolved before the final hearing—leaving the public policy question formally unadjudicated—but recognition was granted. Critically, the court also extended automatic stay protections to non-debtor U.S. cannabis-operating subsidiaries under sections 105(a), 1519, and 1521—relief virtually impossible to obtain for non-debtor affiliates even in a non-cannabis Chapter 11 case.

D. Foreign Schemes of Arrangement

As with the case with many commonwealth jurisdictions, the English insolvency regime provides for schemes of arrangement under Part 26 of the Companies Act 2006, which allows for the restructuring of a single class of obligations through a court-approved compromise. Chapter 11, by contrast, requires a plan addressing all claims—making it impossible to restructure only one set of note obligations without subjecting the debtor's entire capital structure to the bankruptcy process. This structural difference makes English schemes attractive for targeted debt restructurings.

In In re Mega Newco, Ltd., No. 24-12031 (MEW), 2025 WL 601463 (Bankr. S.D.N.Y. Feb. 24, 2025), The court recognized an English scheme conducted through a manufactured cross-border structure.¹⁹ Operadora de Servicios Mega, a Mexican company, created a wholly owned English subsidiary—Mega Newco Limited—solely to restructure New York law-governed notes via an English scheme.²⁰ The scheme was approved unanimously in favor; the English court sanctioned the scheme; and Judge Wiles recognized it as a foreign main proceeding.²¹

COMI was found in the United Kingdom based on the unrebutted registered-office presumption, and Mega Newco's only activities were restructuring activities conducted in England.²² Judge Wiles acknowledged the tension: creating a special purpose entity in a particular jurisdiction solely for restructuring "raises questions" about center-of-main-interest ("COMI") manipulation.²³ But he found no bad faith—the process was transparent, creditors voted unanimously, and no party objected.²⁴

IV. Conclusion

These four categories—nonconsensual third-party releases, reverse vesting orders, cannabis restructuring, and foreign schemes of arrangement—demonstrate that Chapter 15 now occupies territory that Chapter 11 cannot reach. In each instance, the relief is not merely easier to obtain through Chapter 15; it is impossible to obtain under domestic law. The structural reason is consistent across all four: Chapter 15 asks a U.S. court to recognize a foreign proceeding, not to administer assets or confirm a plan. That distinction frees the court from the Bankruptcy Code's and maybe even criminal law's constraints. The result is greater flexibility for cross-border cases.

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¹ (Emphasis added).

² See, e.g., In re Odebrecht Engenharia e Construção S.A. Em Recuperação Judicia, 669 B.R. 457, 464 (Bankr. S.D.N.Y 2025) (quoting In re Atlas Shopping A/S, 404 B.R. 726, 739 (Bankr. SD.N.Y. 2009) ("the discretion that is granted is 'exceedingly broad' since a court may grant 'any appropriate relief' that would further the purposes of Chapter 15 and protect the debtor's assets and the interests of creditors").

³ In re Credito Real, S.A.B. de C.V., SOFOM, E.N.R., 670 B.R. 150, 168 (Bankr. D. Del. 2025).

⁴ Id.

⁵ In re Ephedra Prods. Liab. Litig., 349 B.R. 333 (S.D.N.Y. 2006 (citing H.R. Rep. No. 109-31(I) at 109).

⁶ In re Credito Real, 607 B.R. at 162.

⁷ In re Odebrecht, 669 B.R. at 474.

⁸ In re Credito Real, S.A.B. de C.V., SOFOM, E.N.R., 670 B.R. 150, 168 (Bankr. D. Del. 2025).

⁹ Id. at 155.

¹⁰ Id. at 169.

¹¹ In re Odebrecht, 669 B.R. at 462-64.

¹² Id. at 474-76.

¹³ Id. at 474-75.

¹⁴ Id. at 474-75.

¹⁵ Previously, only a few cases approved RVOs and they were approved without objection or an accompanying opinion. See, e.g., In re Dynamic Tech. Grp. Inc., Case No. 23-41416, (N.D. Tex. July 20, 2023) [Docket No. 59].

¹⁶ In re Iovate, 2026 WL 1295907, at *5-6.

¹⁷ Id.

¹⁸ Id. at *11.

¹⁹ Id. at *1.

²⁰ Id.

²¹ Id. at *1-3.

²² Id. at *3; this trend has continued with recent cases, including in In re NFE Global Holding Ltd., Case no. 26-11268, (Bankr. S.D.N.Y. July 14, 2026) [Docket No. 30].

²³ Id. at *3-4.

²⁴ Id.