Leyza Blanco is part of a bankruptcy law trend that is likely to shed its obscurity as multinational companies fight to survive the fallout of the global recession.

When the Miami-based GrayRobinson attorney filed a Chapter 15 action on behalf of a Bahamian client in October, it marked only the seventh time in four years such a case had been filed in South Florida.

Blanco has been involved with two of them.

“A client will seek Chapter 15 recognition because they are a foreign company that has U.S. assets,” she said. “That recognition permits the courts here to provide the equivalent of a bankruptcy stay for the benefit of the foreign companies that own the U.S. assets.”

Chapter 15 is relatively new. It emerged in 2005 as part of the Bankruptcy Abuse Prevention and Consumer Protection Act, in concert with international agreements, to harmonize insolvency cases involving debtors, assets, claimants and other parties in proceedings involving more than one country. It replaced Section 304 of the Bankruptcy Code and even has its own Web site, Chapter15.com.

“Its sort of like the Geneva Convention of bankruptcy,” said Charles Tatelbaum, a partner in Adorno & Yoss Fort Lauderdale, Fla., office.

Such uniformity among countries is viewed as essential in a globalized economy.

“Its a global question of how to deal with corporations that span multiple jurisdictions,” said Greg Grossman, a founding shareholder at Astigarraga Davis, who filed the first Chapter 15 case in a South Florida bankrutpcy court in December 2006. “It really took its foothold outside of the U.S. first and was recommended into our bankruptcy system pretty much from abroad.”

[continued] Multinational Bankruptcies for a Global Recession.