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Expert Analysis

Extra-Territorial Application Of The Automatic Stay

Law360 (June 4, 2010, 12:35 PM EDT) -- The automatic stay granted by the U.S. Bankruptcy Code, which applies to actions taken against a debtor and its property wherever located in the world, in theory gives U.S. bankruptcy courts far-reaching power to exercise authority over parties in other countries. One clear purpose of the stay is to relieve the debtor of the time and expense involved in defending itself in multiple courts and jurisdictions, including those outside the United States. U.S. bankruptcy courts must, however, be careful to avoid hindering foreign governmental bodies from exercising their regulatory powers....

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