Sunday, December 23, 2012
Foreign Exchange Rate for Allowance of Claims in Bankruptcy
Miami Personal Bankruptcy Lawyer Jordan E. Bublick has over 25 years of experience in filing chapter 13 and chapter 7 bankruptcy cases. His office is in Miami at 1221 Brickell Ave., 9th Fl., Miami and may be reached at (305) 891-4055. www.bublicklaw.com
In the case of In re MacKay, ___ B.R. ___, 2007 WL 4248638 (Bkrtcy.M.D.Pa.)(Thomas, J.), the court was faced with the issue of the appropriate date on which to measure the exchange rate from Canadian dollars into United States dollars in the determination of a creditor's claim. The chapter 7 trustee argued that the appropriate exchange rate is that of the date of the filing of the bankruptcy petition. The trustee's argument was based on section 502(b) which provides in pertinent part "...the court, after notice and a hearing, shall determine the amount of such claim in lawful currency of the United States as of the date of the filing of the petition..."
The court agreed with the chapter 7 trustee that it must determine the amount of a claim as of the petition date, but held that section 502(b) does not answer the underlying question as to the appropriate date to determine the exchange rate. The court looked to the Restatement of the Law 2nd, Conflicts of Laws, section 144 "Time for Converting Foreign Currency into Local Currency" and its Comment G for guidance. Comment G provides that "in enforcing a foreign nation judgment expressed in a foreign currency, a court of a state of the United States will convert the foreign currency into dollars as of the date of its own judgment." Based on the Uniform Foreign Money Judgment Recognition Act as adopted in Pennsylania, the court found the appropriate date to be the date the Canadian judgment was recorded and indexed in the appropriate county recording office in Pennsylvania.
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