In 2014, Ms. Uhland served as lead counsel in the first contested chapter 15 bankruptcy case in New York’s Southern District. After a recent decision by the Second Circuit strengthened requirements for chapter 15 bankruptcy eligibility, foreign firms such as Suntech, an O’Melveny client and global producer of solar panels, have faced increased obstacles when seeking to file for bankruptcy in the United States. Incorporated in the Cayman Islands, Suntech sought to establish its bankruptcy case in its country of origin as the foreign main proceeding in its New York Chapter 15 case. In doing so, the firm hoped to gain bankruptcy court protection that would allow it to continue its restructuring efforts.
A residual trust representing Solyndra, a now-dissolved solar panel manufacturer, argued against Suntech’s eligibility to obtain Chapter 15 protection in New York, positing that the Cayman Islands did not serve as the firm’s primary center of interests and therefore could not serve as the location of its foreign main proceeding. Additionally, Solyndra sought to transfer the case’s venue to the Northern District of California, the location of its pending antitrust lawsuit against Suntech.
In July 2014, the judge’s bench trial decision validated Suntech and O’Melveny’s arguments. The opinion officially recognized Suntech’s Cayman Island proceedings as a foreign main proceeding, allowing the firm to maintain its legal venue in New York. As a landmark decision in bankruptcy law, the results of the case will serve as a precedent for future foreign companies seeking Chapter 15 protection in U.S. courts.