Public Policy Exception in the U.S. Bankruptcy System

The public policy exception within Chapter 15 of the U.S. Bankruptcy Code has been a critical point of discussion. Early cases evaluated the applicability of this exception concerning actions that contradicted U.S. public policy. However, several appellate court decisions have determined that this exception should be interpreted narrowly, often reserving it for instances where procedural fairness in foreign proceedings is significantly in doubt. For example, a notable case involving a German trustee sought U.S. authorization for an email wiretap, which was deemed to violate not only U.S. criminal law but also established public policy, showcasing the narrow application of the exception.