Bank Says Cannabist’s Foreign Insolvency Subverts Public Policy

East West Bank opposed Cannabist Co.'s move to have its Canadian insolvency recognized by a bankruptcy court in Delaware, arguing that its push to monetize its cannabis-related assets is against US public policy.

Recognition of Cannabist’s Canadian proceedings would require the US Bankruptcy Court for the District of Delaware to facilitate criminal conduct because cannabis is illegal under the federal Controlled Substances Act, East West Bank on May 1 told Judge Brendan L. Shannon.

The case could test whether Chapter 15, the US bankruptcy law that recognizes foreign insolvency proceedings, may offer a potential solution for some US cannabis companies ...