Clifford Chance
US Bankruptcy Court Issues Ruling Relating to Cape Town Convention
August 5, 2024
Since its adoption in the US, practitioners and commentators have questioned whether and how a US court would apply the Cape Town Convention in a Chapter 11 case of a non-US airline. The significant number of non-US airlines that have commenced Chapter 11 cases since the onset of the COVID-19 pandemic has intensified that discussion. Although it stops short of definitively answering the question, a recent decision from the Southern District of New York suggests that Alternative A of the Cape Town Convention should be enforceable in a US bankruptcy case so long as the debtor’s primary insolvency jurisdiction has made the necessary declaration to give international effect to Alternative A.
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