U.S. Bankruptcy Court Grants Chapter 15 Recognition to BVI Provisional Liquidation of 30 Prince Group Entities

Summary Introduction

• A U.S. federal judge has formally recognised the British Virgin Islands provisional liquidation of 30 Prince Group companies as a foreign main proceeding under Chapter 15 of the U.S. Bankruptcy Code.
• The ruling, issued on April 23, 2026, by Chief Judge Martin Glenn in the Southern District of New York, allows liquidators from Interpath to pursue assets and investigations in the United States.
• The decision comes amid sweeping U.S. and international enforcement actions against the Cambodia-based conglomerate and its founder, Chen Zhi, who faces allegations of
• Operating a transnational criminal organisation involved in forced-labour scam compounds and cryptocurrency fraud.
• Chen Zhi was arrested in Cambodia in January 2026 and extradited to China.
• The Prince Group has denied all wrongdoing.
• The court rejected objections filed on behalf of Chen Zhi by Cosimo Borrelli of Kroll.
• This marks a significant step in global asset recovery efforts linked to one of the largest cryptocurrency forfeitures in U.S. history.

Full Story

New York, June 12, 2026 —

• In a key development for international insolvency and asset recovery, the U.S. Bankruptcy Court for the Southern District of New York has granted Chapter 15 recognition to the provisional liquidation of 30 British Virgin Islands entities tied to the Prince Group.
• On April 23, 2026, Chief Judge Martin Glenn issued a Memorandum Opinion recognising the BVI proceeding as a foreign main proceeding.
• The order authorises Joint Provisional Liquidators Paul Pretlove, David Standish, and James Drury of Interpath to act in U.S. courts, including seeking discovery, protecting assets, and coordinating with U.S. authorities.
• The BVI liquidation was initiated on public interest grounds by the British Virgin Islands Attorney General in January 2026 — reportedly the first of its kind in BVI history.
• The JPLs were appointed by the Eastern Caribbean Supreme Court after Chen Zhi, the group's chairman, was indicted in the United States and the Prince Group faced sanctions and a massive cryptocurrency forfeiture action.

Background and Allegations

• U.S. authorities allege that since around 2015, Chen Zhi and the Prince Group operated scam compounds in Cambodia that used trafficked workers to run large-scale online fraud schemes, primarily cryptocurrency investment scams ("pig-butchering" scams) targeting victims globally.
• In October 2025, the U.S. Department of Justice indicted Chen Zhi on wire fraud and money laundering conspiracy charges.
• Prosecutors also filed a civil forfeiture complaint seeking approximately 127,271 Bitcoin — then valued in the billions of dollars — described as the largest such forfeiture in DOJ history.
• The U.S. Treasury's OFAC designated the Prince Group a Transnational Criminal Organisation and sanctioned Chen Zhi along with 146 associated individuals and entities.
• The United Kingdom imposed parallel sanctions.
• Chen Zhi was arrested in Cambodia on January 6, 2026, and extradited to China, where he remains in custody.
• The Prince Group has consistently denied the allegations, describing them as politically motivated.

Chapter 15 Proceedings and Objection Overruled

• The Chapter 15 petition was filed on April 8, 2026. Sullivan & Cromwell LLP represents the liquidators.
• An objection was filed by Cosimo Borrelli of Kroll, who claimed to be a director of 25 of the entities pursuant to a power of attorney from Chen Zhi. The objectors argued that the BVI proceeding was not a proper collective insolvency process and that the requested U.S. relief was overly broad.
• Judge Glenn rejected these arguments and granted recognition, paving the way for the liquidators to investigate and pursue assets located in or connected to the United States.

Broader Implications

• The ruling strengthens the liquidators' ability to coordinate with U.S. authorities in ongoing asset recovery efforts. It also highlights the increasing use of Chapter 15 by foreign officeholders in cross-border fraud and sanctions-related cases.
• The Prince Group entities were part of a complex international corporate structure that allegedly facilitated the movement of funds linked to the scam operations.

Sources  

1. U.S. Bankruptcy Court Memorandum Opinion (April 23, 2026) – Full PDF: https://www.nysb.uscourts.gov/sites/default/files/opinions/334560_38_opinion.pdf
2. Sullivan & Cromwell LLP – Press Release on Chapter 15 Filing (April 9, 2026): https://www.sullcrom.com/About/News-and-Events/Highlights/2026/April/S-C-Represents-Joint-Provisional-Liquidators-of-Prince-Group-in-Global-Recovery-Efforts
3. U.S. Department of Justice – Indictment & Forfeiture Announcement (October 14, 2025): https://www.justice.gov/opa/pr/chairman-prince-group-indicted-operating-cambodian-forced-labor-scam-compounds-engaged
4. U.S. Department of the Treasury – OFAC Sanctions on Prince Group TCO (October 14, 2025): https://home.treasury.gov/news/press-releases/sb0278
5. OffshoreAlert – Original Reporting on Chapter 15 Recognition: https://www.offshorealert.com/ (search: "Prince Global Holdings Ltd. et al: Opinion ('Granting Chapter 15 Recognition')")
6. Global Restructuring Review – Coverage of BVI Liquidators' Chapter 15 Efforts: https://globalrestructuringreview.com/article/bvi-liquidators-race-secure-us-recognition-prince-group-faces-crypto-fraud-claims
7. O'Neal Webster – BVI Liquidators Appointment Announcement: https://onealwebster.com/oneal-webster-secures-appointment-of-provisional-liquidators/