Business Restructuring Review Vol. 25 No. 5 September-October 2026
Insights
October 08, 2026
Newsletters
In This Issue
"COMI Tourism" Alone Not Basis for Denying Chapter 15 Enforcement of UK Restructuring Plan Containing Non-Debtor Releases
In In re NFE Global Holdings Limited, 2026 WL 2032660 (Bankr. S.D.N.Y. July 14, 2026), two affiliates of a New York-based Delaware corporation filed restructuring cases under the UK Companies Act (2006), seeking to implement debt swap plans. One debtor was incorporated in the UK specifically for this purpose, aiming to obtain approval for a UK restructuring plan with non-debtor releases, later enforceable in the US via Chapter 15.
The court granted recognition of the UK proceeding and enforcement of the plans, including the releases, stating that while "COMI tourism" should be carefully considered, it cannot solely deny Chapter 15 recognition and plan enforcement. The court also ruled that enforcement was within its discretion, adequately protected creditors' rights, and wasn't contrary to US public policy.
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Chapter 11 "Best Interests of Creditors Test" Not an Independent Basis for Subordination of a Claim
In re Matheson Flight Extenders, Inc. (B.A.P. 9th Cir. 2026) held that a plan administrator couldn't use the "best interests of creditors test" in §1129(a)(7) to subordinate punitive damages claims after a reorganized debtor defaulted under a confirmed chapter 11 plan. The test is a confirmation condition, not a basis for §510 subordination.