The scenario is too frequent in the high capital cost, low margin and volatile world of international shipping: A foreign ship owner, caught in the wrong part of the economic cycle, is literally and figuratively having difficulty staying afloat and seeks U.S. bankruptcy protection.
Filing for protection in domestic bankruptcy courts is relatively easy for these foreign-based ship owners, as all that is needed is to have property in the jurisdiction. The only qualifications a “debtor” must meet under Section 109(a) of the Bankruptcy Code, is that the person “resides or has a domicile, a place of business or property in the United States or a municipality.” Courts have ruled that even something of relatively low value (such as a peppercorn) may satisfy the jurisdictional test.
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