Second Circuit Fails to See the Comity in Chapter 15.

In Krys v Farnum Place, the Second Circuit ruled that, in a chapter 15 ancillary proceeding, a SIPA claim is within the territorial jurisdiction of the United States and its sale by the foreign representative must be subjected to review under Bankruptcy Code section 363. In so holding, the court vacated an earlier decision of the Bankruptcy Court, which held that that the SIPA claim was not within the territorial jurisdiction of the United States and that principles of comity could trump the requirements of section 363, as applied by section 1520. Two peculiarities in the facts limit the precedential impact of the decision: the claim sale agreement required approval by the Bankruptcy Court and the foreign court specifically deferred to the Bankruptcy Court to approve the sale. [ABSTRACT FROM AUTHOR]