In the face of financial distress, or a creditor exercising its remedies against a company's assets, there are significant benefits to filing a Chapter 11 case under the U.S. Bankruptcy Code regardless of where in the world the debtor company is headquartered or conducts its business. Among these benefits are the worldwide reach of the automatic stay under 11 U.S.C. Section 362(a), the ability of management to remain in control of the debtor company during the pendency of the bankruptcy case, and the lack of an insolvency requirement. Accordingly, the eligibility requirements to become a debtor under the Bankruptcy Code are of great interest for distressed foreign companies.

A recent decision of the U.S. Bankruptcy Court for the Southern District of New York reiterates just how minimal the ties to the United States need to be for foreign debtors. In In re JPA No. 111, No. 21-12075, 2022 Bankr. LEXIS 259 (Bankr. S.D.N.Y. Feb. 1, 2022), the bankruptcy court denied a motion to dismiss two bankruptcy cases filed by Japanese single-purpose entities, finding that a reversionary interest in retainers deposited with the debtors' U.S. bankruptcy counsel satisfied the requirement that the debtors have "property" in the United States.