United States - Market Insights

Asset tracing and enforcement trends in the United States

The following outlines three areas where we have seen significant activity in the United States:

• provisional relief in aid of foreign insolvency proceedings prior to Chapter 15 recognition;
• section 1782 discovery in aid of foreign enforcement proceedings; and
• enforcement of Energy Charter Treaty Awards against foreign states.

Availability of pre-recognition provisional relief in Chapter 15 proceedings

Chapter 15 of the US Bankruptcy Code provides a mechanism for foreign representatives to obtain US judicial assistance in connection with foreign insolvency proceedings. Although the principal forms of relief — including the automatic stay, discovery, and entrustment of assets to the foreign representative — generally become available only upon formal recognition of the foreign proceeding under section 1517, section 1519 separately authorizes US bankruptcy courts to grant “provisional relief” during the gap period between filing and recognition where such relief is “urgently needed to protect the assets of the debtor or the interests of the creditors.” This can provide a powerful tool for foreign liquidators seeking to preserve US-based assets and obtain information — including through the discovery tools available post-recognition under section 1521(a)(4) and Bankruptcy Rule 2004 — about a debtor’s affairs before adverse parties have an opportunity to dissipate assets or otherwise frustrate the foreign proceeding. Provisional relief under section 1519 is subject to the four-factor preliminary injunction standard.

A recent decision by Chief Judge Martin Glenn of the US Bankruptcy Court for the Southern District of New York illustrates US courts’ willingness to deploy these gap-period tools to support cross-border insolvency proceedings, particularly where the foreign proceeding intersects with US criminal enforcement and asset recovery priorities. In In re Prince Global Holdings Ltd., No. 26-10769 (MG), 2026 WL 1096899 (Bankr. S.D.N.Y. Apr. 23, 2026), the court granted provisional relief to the Joint Provisional Liquidators (JPLs) of Prince Global Holdings Limited and 29 affiliated debtors (the “Debtors”) in a contested Chapter 15 proceeding ancillary to British Virgin Islands (BVI) insolvency proceedings.

The Prince Group is a network of more than 100 entities identified by US authorities as a “transnational criminal enterprise.” On October 14, 2025, its chairman, Chen Zhi, was indicted in the Eastern District of New York on wire fraud and money laundering conspiracy charges tied to forced-labor cryptocurrency “pig-butchering” schemes operated out of Cambodia. The same day, federal prosecutors filed a civil forfeiture action seeking approximately 127,271 Bitcoin (roughly USD 8.7 billion), and OFAC, FinCEN, and UK authorities imposed coordinated sanctions on the Prince Group and associated persons.

Because UK sanctions extend automatically to the BVI, the BVI Attorney General was empowered under the BVI Insolvency Act to appoint liquidators of the Debtors on public-interest grounds, which displaced prior management and vestied exclusive authority over the Debtors’ affairs and assets in the JPLs (Paul Pretlove, David Standish, and James Drury). The JPLs’ investigation into the Debtors’ financial affairs, however, made limited headway due to the Prince Group’s historically opaque corporate structure and active resistance from pre-JPL management.

Against this backdrop, the JPLs filed a Chapter 15 petition seeking recognition of the BVI proceedings and, simultaneously, an Emergency Motion under section 1519 seeking discovery authority under section 1521(a)(4) and Rule 2004 and protection of US assets pending recognition. A group of “Objecting Debtors,” acting under direction of pre-JPL management and represented by Boies Schiller Flexner (which also represents Mr. Chen in the forfeiture proceeding), challenged the Emergency Motion as exceeding the JPLs’ BVI authority and as impermissible under section 1519.

The court granted the requested provisional relief. As a threshold matter, it held the BVI proceedings were likely to qualify as a “foreign main proceeding” under section 1517: commenced for liquidation, supervised by the BVI Court, and collective in nature, having been initiated in the public interest for creditors generally. The court further found each Debtor’s center of main interests was likely the BVI, where each was incorporated and continuously maintained its registered office, triggering the section 1516(c) presumption that the Objecting Debtors failed to rebut. Applying the four-factor preliminary injunction standard required by section 1519(e), the court found irreparable harm based on the threat of asset dissipation arising from the obfuscated corporate structure and concluded that the balance of harms and public interest favored relief given US enforcement priorities and the value of cross-border cooperation. The court further held affected parties were “sufficiently protected” under section 1522(a) and waived the bond requirement, given that the Debtors’ assets were substantially OFAC-blocked and the relief was time-limited. Accordingly, the court entered an order, inter alia, recognizing the JPLs as the “exclusive authority” to administer the Debtors’ US assets and affairs, authorizing the JPLs to issue subpoenas, and applying the automatic stay under section 362 with respect to the Debtors and their US-based property.

On June 11, 2026, Judge Glenn recognized the BVI proceedings as foreign main proceedings under Chapter 15, overruling the objection filed by Cosimo Borrelli, who purported to have been appointed sole director of 25 of the 30 debtor entities. The court held that the BVI orders replaced the debtors’ directors with the JPLs and precluded the Borrelli-aligned debtors, acting through Borrelli, from objecting to the Chapter 15 cases in the US, even though the BVI court had permitted Borrelli to oppose the JPLs within the BVI proceedings. See In re Prince Global Holdings Ltd., No. 26-10769 (MG), 2026 WL 1694259 (Bankr. S.D.N.Y. June 11, 2026). Entry of the recognition order followed a further round of contested motion practice over its terms. See In re Prince Global Holdings Ltd., No. 26-10769 (MG), 2026 WL 1758972 (Bankr. S.D.N.Y. June 18, 2026). Borrelli noticed an appeal the same day, and the recognition determination is now before the district court. See In re Prince Global Holdings Ltd., No. 26-cv-5279 (S.D.N.Y.).

As Prince Global illustrates, section 1519 can provide foreign liquidators with meaningful, immediate US judicial assistance — including discovery authority and the automatic stay — well before the recognition stage is resolved. That relief is rarely uncontested, however. Prince Global required three written opinions and more than two months to move from petition to an entered recognition order, and that order remains subject to appellate review — an important reminder that gap-period relief secures time to act, not finality.

Availability of section 1782 discovery in aid of foreign enforcement proceedings

By now, the existence of a US federal statute, 28 U.S.C. § 1782, authorizing interested parties to obtain discovery (documents and deposition testimony) from individuals and entities in the United States for use in foreign proceedings is widely known. Many disputes lawyers have also heard of the United States Supreme Court’s decision in ZF Automotive US, Inc. v. Luxshare, Ltd., 596 U.S. 619 (2022), where the court held that section 1782 discovery is unavailable in aid of international commercial arbitrations (as distinguished from foreign court proceedings). Subsequent circuit court decisions have held that section 1782 discovery is also unavailable in aid of investor-state arbitrations.

However, section 1782 discovery remains available in aid of foreign enforcement proceedings, regardless of whether they involve an arbitral award or court judgment. Such discovery can be a powerful tool to obtain information about a debtor’s assets and business activities. However, to obtain section 1782 discovery, the applicant must demonstrate the existence of an ongoing or contemplated foreign judicial proceeding of some kind. The Second Circuit (the federal appellate court with jurisdiction over federal district courts in New York) has held that the foreign proceeding must be “adjudicative in nature” (that is, there must be something left for the foreign court to decide). See Euromepa, S.A. v. R. Esmerian, Inc., 154 F.3d 24, 27 (2d Cir. 1998).

Whether this requirement is satisfied is determined on a case-by-case basis and requires careful consideration. Two district court decisions from the Southern District of New York illustrate some of the factors that may be relevant. In In re Application of Lake Holding & Finance S.A., No. 20-MC-652 (RA) (KNF), 2021 WL 2581427 (S.D.N.Y. June 23, 2021), the court granted discovery for use in Cypriot proceedings to enforce a Russian judgment where applications for disclosure and asset-tracing orders, which required evidence on asset identity and ownership, remained pending before the Cypriot court. In the second case, In re Application of China Construction Bank (Asia) Corporation Limited for an Order Seeking Discovery Pursuant to 28 U.S.C. § 1782, No. 23-MC-17 (JMF), 2023 WL 3791711 (S.D.N.Y. June 2, 2023), the section 1782 applicant sought discovery concerning the debtor’s assets and financial dealings, including his role as president of Inter Milan, for use in connection with a Hong Kong debtor examination. The court held the debtor examination was adjudicative because it involved judicial factfinding at a hearing. As these cases demonstrate, post-judgment or post-award enforcement proceedings may satisfy the “adjudicative in nature” requirement where the foreign court will hear evidence and decide concrete issues relating to enforcement, rather than merely supervising collection of an already-final judgment. Alter ego/veil piercing and fraudulent conveyance claims, among others, typically should clear that bar.

Enforcement of Energy Charter Treaty awards against foreign states

The US Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. § 1605(a)(6), gives US courts jurisdiction to enforce arbitral awards against foreign states where the “award is or may be governed by a treaty or other international agreement in force for the United States calling for the recognition and enforcement of arbitral awards.” This includes both awards under the ICSID Convention and the New York Convention.

In recent years, US courts have grappled with how the Court of Justice of the European Union’s decisions in Slovak Republic v. Achmea (2018) and Moldova v. Komstroy (2021) affect the enforcement of Energy Charter Treaty (ECT) awards. Achmea held that arbitration clauses in intra-EU bilateral investment treaties violate EU law; Komstroy extended that reasoning to the ECT, a multilateral accord that provides for arbitration of investor-state disputes.

The practical issue is whether those EU law decisions prevent US courts from enforcing ECT awards, even after a tribunal has rendered an award and the investor seeks recognition in the United States.

The DC Circuit has said they do not eliminate US jurisdiction. In NextEra Energy Global Holdings B.V. v. Kingdom of Spain, 112 F.4th 1088 (D.C. Cir. 2024), the court held that whether EU companies are covered investors under the ECT goes to the scope of the ECT’s arbitration clause, not the court’s enforcement jurisdiction under the FSIA. To create jurisdiction, the court explained, it was enough that the arbitral tribunal purported to render an ECT award. The court emphasized it was not deciding whether the ECT’s dispute resolution mechanism actually extends to EU investors, or whether enforcement ultimately should be granted. Spain has since petitioned the United States Supreme Court for review of the D.C. Circuit’s decision.

Following NextEra Energy, several district court decisions have enforced ICSID awards in favor of EU investors and against EU Member States under the ECT. Their reasoning was that US courts are required to treat ICSID awards like final judgments of US state courts and must afford them “full faith and credit.” One example is Blasket Renewable Investments LLC v. Kingdom of Spain, No. CV 20-1081 (BAH), 2025 WL 3516146 (D.D.C. Sep. 11, 2025).

But non-ICSID ECT awards are not entitled to the same “full faith and credit” under the New York Convention. As a result, EU investors may have difficulty enforcing such awards against EU Member States where the arbitral seat was also in the EU. In Mercuria Energy Group Ltd v. Republic of Poland, 805 F. Supp. 3d 174 (D.D.C. 2025), the district court declined to enforce a Cypriot investor’s ECT award against Poland resulting from a Swedish-seated arbitration after Sweden’s highest court set it aside. Absent some “affront to public policy,” the district court found it was “obligated to afford comity” to the Swedish court’s judgment setting aside the award. The court saw “no reason to find” the Swedish court’s decision “contrary to American public policy.” The investor has since appealed to the D.C. Circuit.