In re AJW Offshore, Ltd.
In re AJW Offshore, Ltd.
Opinion of the Court
MEMORANDUM OPINION AUTHORIZING ADDITIONAL RELIEF PURSUANT TO 11 U.S.C. § 1521
Pending before this Court is the general request of the duly appointed foreign representatives in these four Chapter 15 cases for additional relief pursuant to 11 U.S.C. § 1521(a)
Jurisdiction
This Court has jurisdiction over this core proceeding pursuant to 28 U.S.C. §§ 1334(a) and 157(b)(2)(A), (O) and (P), and the Standing Orders of Reference in effect in the Eastern District of New York dated August 28, 1986, and as amended on December 5, 2012, but made effective nunc pro tunc as of June 23, 2011.
Background
The Offshore Entities
The four foreign entities at issue are AJW Offshore, Ltd. (“Offshore I”), AJW
According to Petitioners
Petitioners assert that Offshore I had 44 investors, that Offshore II had 156 investors, and that Master Fund I and Master Fund II each had two investors, their feed
On September 28, 2011, the Securities and Exchange Commission commenced a civil action against Ribotsky and NIR before the United States District Court for the Eastern District of New York
The Chapter 15 Recognition Proceedings
On January 7, 2013, Petitioners filed petitions for recognition under Chapter 15. Following a recognition hearing held on February 4, 2013 (the “Recognition Hearing”)
As part of the Verified Petition, Petitioners also sought additional relief under each subsection of § 1521(a), other than (a)(3), and not under (b).
Following recognition, this Court set a hearing for February 20 to consider Petitioners’ request for additional relief (the “Additional Relief Hearing”). Due notice of the Recognition Hearing was given. One objection to Petitioners’ request for additional relief was filed by the law firm of Bingham McCutchen LLP (“Bingham” and the “Bingham Objection”), which did not challenge this Court entrusting the foreign representatives with the administration and realization of the Offshore Funds’ assets under § 1521(a)(5) or their general right to seek discovery, [dkt item 40],
At the Additional Relief Hearing, Petitioners withdrew without prejudice their request for additional relief under § 1521(a)(1) and (2)
Discussion
“Chapter 15 implements the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Cross&emdash; Border Insolvency;” courts interpreting Chapter 15 are required under § 1508 to “consider its international origin, and the need to promote an application of th[e] chapter that is consistent with the application of similar statutes adopted by foreign jurisdictions in interpreting its provisions”. In re Condor, 601 F.3d 319, 321 (5th Cir. 2010) (quoting 11 U.S.C. § 1508). Chapter 15 both expressly authorizes certain relief to be accorded and explicitly limits other relief which may be provided. For example, § 103(a) provides that Chapter 1, “sections 307, 362(o), 555 through 557, and 559 through 562” automatically apply in a case under Chapter 15, and § 1523(a) immediately upon recognition provides a foreign representative with standing in cases regarding the debtor pending under another chapter of the Bankruptcy Code “to initiate actions under sections 522, 544, 545, 547, 548, 550, 553, and 724(a)”. 11 U.S.C. §§ 103(a); 1523(a). However, while § 1521(a)(7) authorizes a Court to grant “any additional relief that may be available to a trustee,” such relief may not include “relief available under sections 522, 544, 545, 547, 548, 550, and 724(a).” 11 U.S.C. § 1521(a)(7). In other words, a foreign representative may not utilize these avoidance powers in a Chapter 15 case, and may only do so in a ease pending or filed under another chapter.
Chapter 15 is silent as to the applicability or inapplicability of other sections of the Bankruptcy Code, specifically including §§ 542 and 543. Thus, determining whether Petitioners are entitled to utilize §§ 542 and 543 requires an analysis of the relevant provisions of Chapter 15 and related Bankruptcy Code provisions, case law under prior § 304
Statutory Construction
The first consideration in determining whether turnover is available as part of the “any additional relief’ available under § 1521(a)(7) is statutory construction&emdash;that is, what did Congress provide under the statute. Therefore, this Court’s analysis necessarily begins by looking to the language of the statute itself to determine if the statute is plain or ambiguous. Lamie v. United States Trustee, 540 U.S. 526, 534, 124 S.Ct. 1023, 157 L.Ed.2d 1024 (2004); United States v. Ron Pair Enters., 489 U.S. 235, 241, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989); see also In re Miller, 462 B.R. 421, 429 (Bankr.E.D.N.Y. 2011). “[I]n determining plainness or ambiguity,
However, “[sjtatutory language is ambiguous if it is susceptible to two or more reasonable meanings.” Phillips, 485 B.R. at 56. In that setting, where the plain language as clarified by context fails to resolve any statutory ambiguity, a court may resort to canons of statutory construction to aid in its interpretation. United States v. Colasuonno, 697 F.3d 164, 173 (2d Cir. 2012); United States v. Dauray, 215 F.3d 257, 264 (2d Cir. 2000). Significantly, statutory construction is a holistic endeavor; thus, a statute must be interpreted in light of the statutory scheme as a whole. United Sav. Ass’n of Texas v. Timbers of Inwood Forest Assoc., Ltd., 484 U.S. 865, 371, 108 S.Ct. 626, 98 L.Ed.2d 740 (1988); Phillips, 485 B.R. at 59.
Thus, this Court will first consider the plain language of § 1521(a)(7). Section 1521(a) provides that the bankruptcy court may grant a foreign representative “any appropriate relief,” including staying various aspects of court proceedings involving the debtor or its assets, suspending rights to transfer, encumber or dispose of the debtor’s assets, providing for discovery, granting powers to the foreign representatives to administer the debtor’s U.S. assets and, specifically as to § 1521(a)(7), “granting any additional relief that may be available to a trustee, except for relief available under sections 522, 544, 545, 547, 548, 550, and 724(a).” 11 U.S.C. § 1521(a)(7). Notably, §§ 542 and 543 are relief that may be available to a trustee and are not among those sections explicitly excluded. Thus, the plain language allows a court to allow a foreign representative to utilize turnover subject, as § 1521 requires, to sufficient protections under § 1522.
Moreover, Congress did not otherwise preclude a foreign representative from being given authority to seek turnover under § 542 or § 543. The Bankruptcy Code in § 103(a) provides that “chapters 1, 3, and 5 of this title apply in a case under chapter 7, 11, 12, or 13 of this title, and this chapter, sections 307, 362(o), 555 through 557, and 559 through 562 apply in a case under chapter 15.” 11 U.S.C. § 103(a). Congress did not use a limiting phrase such as “only” in listing the sections which have immediate application in Chapter 15 cases. See In re Pro-Fit Holdings, Ltd., 391 B.R. 850, 866 (Bankr. C.D.CaI. 2008)
Further, if § 103 was intended to constitute the constellation of Code provisions applicable in Chapter 15, that would render § 1521(a)(7) meaningless. Section 1521(a)(7) provides that a bankruptcy court may “grant[] any additional relief that may be available to a trustee, except for” specified avoidance actions; if Congress had intended that the only powers available to a debtor or trustee which are also available to a foreign representative are those expressly incorporated by § 103, then § 1521(a)(7) serves no purpose, particularly given that § 1511 expressly authorizes a foreign representative to commence another case under another chapter of the Bankruptcy Code and § 1523 grants a foreign representative standing to bring the excluded avoidance actions in another ease commenced under another chapter. Moreover, if a foreign representative was only intended to utilize turnover if another case was pending under the Bankruptcy Code, then § 1523 would grant the foreign representative standing to seek turnover in a case pending under another chapter in addition to use of the excluded avoidance powers. This Court will not adopt an analysis that renders § 1521(a)(7) meaningless. See Kawaauhau v. Geiger, 523 U.S. 57, 62, 118 S.Ct. 974, 140 L.Ed.2d 90 (1998) (courts should hesitate to “adopt an interpretation of a congressional enactment which renders superfluous another portion of that same law.”)
Thus, the Bankruptcy Code does not prohibit the court from authorizing the foreign representative to employ turnover powers available under §§ 542 and 543;
An analogous situation regarding § 1521(a)(7) was addressed by the Fifth Circuit in Condor. There, a foreign representative in a foreign main proceeding filed an adversary proceeding in the United States stating claims under the domiciliary law of the foreign debtor, there Nevis,
Similarly, §§ 542 and 543 are not expressly excluded from § 1521(a)(7). Given the broad scope of relief available under Chapter 15, additional exceptions to § 1521(a)(7) should not be implied,
This Court recognizes that few courts have reached the specific issue here of whether Chapter 15 allows a foreign representative to utilize the turnover provisions of §§ 542 and 543; these courts have generally recognized a foreign representative’s right to seek turnover, but not via § 542 and § 543, but rather, under § 1521(a)(5) and (b). Compare In re Lee, 472 B.R. 156, 182 (Bankr.D.Mass. 2012)
While this Court will entrust the foreign representatives with the administration and realization of the Offshore Funds’ assets within the territorial jurisdiction of the United States under § 1521(a)(5),
This same protection will also apply to the use of discovery under § 1521(a)(4)&emdash;discovery will only be permitted by motion on notice with an opportunity for hearing to the adverse parties and by making examination and production of documents under Rule 2004 of the Federal Rule of Bankruptcy Procedure (the “Bankruptcy Rules”) available, with any discovery to be allowed to be subject to conditions imposed in accordance with § 1522. See, e.g., In re Millennium, Global Emerging Credit Master Fund Ltd., 471 B.R. 342, 347 (Bankr.S.D.N.Y. 2012) (although not reaching the issue, the court discussed that granting the foreign representative broad discovery rights under § 1521(a)(4) by making the full scope of Bankruptcy Rule 2004 available would be consistent with the main purposes of Chapter 15 and former § 304).
Former § SOI of the Bankruptcy Code Does Not Conflict with this Court’s Analysis of § 1521(a)(7)
The legislative history to Chapter 15 directs courts to use case law interpreting former 304 in interpreting current Chapter 15 issues, unless the former 304 is contradicted by the current provisions of Chapter 15. See H.R.Rep. No. 109-31, at 145
Former § 304 authorized granted courts to order turnover of estate property upon request of a foreign representative.
Prior to the enactment of Chapter 15, several courts had suggested that turnover powers available under §§ 542 and 543 were not available to a foreign representative under a case commenced under former § 304, as former § 304(b) specifically authorized turnover. See Ma v. Cont’l Bank, N.A., 905 F.2d 1073, 1075 (7th Cir. 1990) (concluding that former § 304(b) not § 542 would permit the foreign representative to direct the stakeholder to surrender assets); In re Treco, 229 B.R. 280, 292 (Bankr.S.D.N.Y. 1999), aff'd, 239 B.R. 36 (S.D.N.Y. 1999), rev’d on other grounds, 240 F.3d 148 (2d Cir. 2001) (stating that § 542 was “inapplicable in ancillary cases” commenced under former § 304); see generally In re Koreag, Controle et Revision SA., 961 F.2d 341, 357 (2d Cir. 1992) (“[A] § 304 proceeding is not a bankruptcy case that implicates the full range of procedural and substantive provisions applicable to domestic bankruptcies.”); In re Metzeler, 78 B.R. 674, 677 (Bankr.S.D.N.Y. 1987) (“a foreign representative may assert, under § 304, only those avoiding powers vested in him by the law applicable to the foreign estate.”)
Here, as noted above, Chapter 15 does not have a specific provision authorizing turnover under § 542 or § 543, but does have the general incorporation of powers available to a trustee under § 1521(a)(7), subject to the protection of affected interests under § 1522; read together, these provisions harmonize the turnover provisions of former § 304, and do not reflect a legislative intention to eradicate a foreign representative’s ability to seek turnover.
Comity
“Central to Chapter 15 is comity.” Ad Hoc Group of Vitro Noteholders v. Vitro S.A.B. de CV (In re Vitro SA.B. de CV), 701 F.3d 1031, 1043 (5th Cir. 2012); Condor, 601 F.3d at 321 (Chapter 15 “directs courts [pursuant to 11 U.S.C. § 1508] to ‘consider its international origin, and the need to promote an application of th[e]
International uniformity is a primary goal of the Model Law and thus of chapter 15. 11 U.S.C. §§ 1501(a), 1508. UNCITRAL expressed the desire that the Model Law be enacted by adopting countries with as few changes as possible “in order to achieve a satisfactory degree of harmonization and certainty.”
In re British Am. Ins. Co. Ltd., 2013 WL 765373, at *2 (Bankr.S.D.Fla. Feb. 28, 2013) (quoting United Nations Commission on International Trade Law (UNCI-TRAL), Cross-Border Insolvency: Guide to Enactment of the UNCITRAL Model Law on Cross-Border Insolvency, at part 2 ¶ 12, U.N. Doc. A/CN.9/442 (Dec. 19, 1997), available at http://vnow.uncitral.org/ pdflenglishltextslins0lvenlmsdlvency-e.pdf [“Model Law”]). Comity has been defined as the “recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens, or of other persons who are under the protections of its laws.” Vitro, 701 F.3d at 1043-44, quoting Hilton v. Guyot, 159 U.S. 113, 164, 16 S.Ct. 139, 40 L.Ed. 95 (1895). Post-recognition relief, such as the additional relief sought by Petitioners, “is largely discretionary and turns on subjective factors that embody principles of comity.” In re Bear Steams High-Grade Structured Credit Strategies Master Fund, Ltd., 389 B.R. 325, 333 (S.D.N.Y. 2008); British Am., 2013 WL 765373, at *25 (same).
Petitioners’ general request for the use of § 542 or § 543 powers pursuant to § 1521(a)(7) is consistent with principles of international comity. As noted in Condor, while § 1521(a)(7) allows a bankruptcy court to grant a foreign representative additional relief other than under §§ 522, 544, 545, 547, 548, 550, and 724(a), “[t]his exception does not exist in the Model Law.” Condor, 601 F.3d at 323. The Model Law at Article 21 would provide for “[gjranting any relief that may be available to [insert the title of a person or body administering a reorganization or liquidation under the law of the enacting State] under the laws of this State.” Model Law, Art. 21 at ¶ 1(g). The Model Law at Article 22 would require that for any grant of relief under Article 21, “the court must be satisfied that the interests of the creditors and other interested persons, including the
As Judge Kimball noted in British American, the Model Law has been enacted in the following countries: Australia (2008), British Virgin Islands, overseas territory of the United Kingdom of Great Britain and Northern Ireland (2003), Canada (2005), Colombia (2006), Eritrea (1998), Great Britain (2006), Greece (2010), Japan (2000), Mauritius (2009), Mexico (2000), Montenegro (2002), New Zealand (2006), Poland (2003), Republic of Korea (2006), Romania (2002), Serbia (2004), Slovenia (2007), South Africa (2000), Uganda (2011), and the United States of America (2005). British Am., 2013 WL 765373, at *2; UNCITRAL, Status: 1997-Model Law on Cross-border Insolvency, http:// www.uncitral.org/uncitral/en/uncitraL texts/insolvency/1997ModeLstatus.html (last visited March 12, 2013).
Conclusion
For the foregoing reasons, this Court will entrust the foreign representatives with the administration and realization of the Offshore Funds’ assets within the territorial jurisdiction of the United States under § 1521(a)(5), will authorize Petitioners to seek turnover of any of the Offshore Funds’ assets located within the territorial jurisdiction of the United States under § 542 or § 543, and will permit Petitioners to seek discovery or seek examination or production of documents pursuant to Bankruptcy Rule 2004, subject to the requirement that any request for turnover or for discovery must be sought by motion on notice in accordance with Bankruptcy Rule 2002.
An order consistent herewith shall issue.
. Unless otherwise indicated, all statutory references are to title 11 of the United States Code, §§ 101-1532 (the “Bankruptcy Code”).
. Petitioners commenced these Chapter 15 cases by filing the Official Form B1 Chapter 15 petitions for each of the Offshore Funds (the "Petitions”) [dkt item 1], along with the Verified Petition of Foreign Representatives Ian Stokoe and David Walker in Support of Applications for Recognition of Foreign Main Proceedings Pursuant to 11 U.S.C. § 1517 and Additional Relief (the "Verified Petition”) and the various exhibits attached thereto [dkt items 3, 5-7]. The information regarding the Offshore entities and the allegations made by Petitioners is derived therefrom, unless otherwise noted.
. According to Petitioners, Offshore I was incorporated as an exempted liability company under the Cayman Islands Companies Law in 2001 and designed primarily to accommodate eligible non-US investors. Master Fund I was incorporated under the Cayman Islands Companies Law in 2007. NIR was the sole owner of First Street, which owned 100% of Offshore I’s voting shares. Offshore I, in turn, owned approximately 70% of Master Fund I; the remaining 30% ownership interest in Master Fund I belonged to the U.S. based entity Qualified Partners I, LLC (“Qualified Partners I”), an investment manager that NIR also controlled. In November 2008, Ribot-sky/NIR restructured Offshore I and Master Fund I, by forming Offshore II, again, designed principally to accommodate eligible non-U.S. investors, U.S. based Qualified Partners II, LLC ("Qualified Partners II”) and Master Fund II. The ownership structure of Master Fund II also mirrored the ownership structure of Master Fund I. The sole shareholders and feeder funds of Master II were Offshore II and Qualified Partners II, just as Offshore I and Qualified Partners I were the sole shareholders of Master Fund I. First Street was the investment manager of Offshore II and Master Fund II. As with Offshore I, First Street owned 100% of the voting shares of Offshore II, which, in turn, owned the majority of Master Fund II.
.According to the Securities and Exchange Commission, "[t]he term 'microcap stock’ applies to companies with low or 'micro' capi-talizations, meaning the total value of the company's stock. Microcap companies typically have limited assets.” Microcap Stock: A Guide for Investors, http://www.sec.gov/ investor/pubs/microcopstock.htm (last visited Mar. 18, 2013).
. Securities and Exchange Commission v. The NIR Group, LLC, et al., 11-cv-04723 (E.D.N.Y. filed Sept. 28, 2011).
. Ribotsky formed several U.S. based onshore funds with similar investment strategies — AJW Partners, LLC, AJW Partners II, LLC, New Millennium Capital Partners II, LLC, New Millennium Capital Partners III, LLC, and Qualified Partners I and II.
. After filing the Petitions, Petitioners filed an application for entry of an order for joint administration of the Offshore Funds cases, which this Court entered on January 11, 2013 designating AJW Offshore, Ltd. as the lead case, [dkt item 16].
. Petitioners request for § 1521 additional relief was contained within the Verified Petition, [dkt item 3], along with a request for pre-recognition relief pursuant to § 1519; Petitioners also filed a Motion for Provisional
[notwithstanding any other provision of this section, the failure of a foreign representative to commence a case or to obtain recognition under this chapter does not affect any right the foreign representative may have to sue in a court in the United States to collect or recover a claim which is the property of the debtor.
11 U.S.C. § 1509(f). However, this generalized request for relief is not properly now before the Court, and the Court advised Petitioners at the Additional Relief Hearing that it was not considering this request at this juncture.
.As a general matter, §§ 542 and 543 provide that parties holding property of the estate are required to turn over that property to the trustee. See 11 U.S.C. §§ 542, 543. Section 542 addresses circumstances in which estate property is held by a noncustodial party, while § 543 applies when property of the estate is held by a custodian. Id.
. Sections 1521(a)(1) and (a)(2) provide:
Upon recognition of a foreign proceeding, whether main or nonmain, where necessary to effectuate the purpose of this chapter and to protect the assets of the debtor or the interests of the creditors, the court may, at the request of the foreign representative, grant any appropriate relief, including—
(1) staying the commencement or continuation of an individual action or proceeding concerning the debtor's assets, rights, obligations or liabilities to the extent they have not been stayed under section 1520(a); [or]
(2) staying execution against the debtor’s assets to the extent it has not been stayed under section 1250(a).
11 U.S.C. § 1521(a)(l)-(2).
. Section 542(e) states, "[s]ubject to any applicable privilege, after notice and a hearing, the court may order an attorney, accountant, or other person that holds recorded information, including books, documents, records, and papers, relating to the debtor's property or financial affairs, to turn over or disclose such recorded information to the trustee.” 11 U.S.C. § 542(e).
. Upon recognition, a foreign representative may commence a case for a debtor under another chapter of the Bankruptcy Code. 11 U.S.C. § 1511.
. "Congress intended that case law under [former] section 304 apply unless contradicted by Chapter 15.” In re Condor, 601 F.3d 319, 328 (5th Cir. 2010), citing H.R. Rep. No. 109-31 (2005), 2005 WL 832198.
. The Pro-Fit court stated:
It is highly unlikely that a court can simply ignore all the rest of the bankruptcy code and the other provisions relating to bankruptcy cases in the United States, just because they are not specifically mentioned in chapter 15 or § 103. The better reading is that many other provisions of the bankruptcy code can be applicable in a chapter 15 case: Some should apply in most cases, while others should be applied only on a case by case basis.
Pro-Fit Holdings, Ltd., 391 B.R. at 866.
. Former Bankruptcy Judge Leif M. Clark has stated:
Section 1521(a)(7) authorizes the court to grant to the foreign representative the sort of relief that might be available to a trustee appointed in a full bankruptcy case [, which] would include, most importantly, an order requiring the turnover of property belonging to the debtor and the turnover of property in the hands of a custodian [under § 543]. This can be an important power when [a foreign representative] is faced with the existence of a receiver that might previously have been appointed at the request of a creditor.
Clark, Chapter 15 § 7[2]; see also Leif M. Clark & Karen Goldstein, Sacred Cows: How to Care for Secured Creditors’ Rights in Cross-Border Bankruptcies, 46 Tex. Int’l LJ. 513, 529 ("An additional section that a foreign representative might think to use in making a request for turnover of assets is § 1507.").
. In Condor, the Fifth Circuit reversed the district court’s dismissal of the case for lack of jurisdiction. Condor, 601 F.3d at 329. The Southern District of New York in In re Fairfield Sentry Ltd. cited Condor for the proposition that, while § 1521(a)(7) allows a bankruptcy court to authorize a foreign representative to bring avoidance actions other than under §§ 544, 545, 547, 548, 550, and 724(a), including foreign law based actions, "[s]ection 1521(a)(7) does not confer core jurisdiction on the Bankruptcy Court.” In re Fairfield Sentry Ltd., 458 B.R. 665, 682 (S.D.N.Y. 2011). Said otherwise, the Fairfield Sentry court differentiated between a bankruptcy court having jurisdiction to allow a foreign representative to bring an action versus having constitutional authority to hear and determine that action. But see In re British Am. Ins. Co. Ltd., 2013 WL 765373, at *19-22 (Bankr.S.D.Fla. Feb. 28, 2013) (disagreeing with Faiifield Sentiy analysis, and concluding that "section 157(b)(2)(P) should be read to include within the ambit of core chapter 15 matters the recognition procedure and requests for relief covered by the various provisions of chapter 15”). Neither Fairfield Sentry nor Condor reached the issue of whether a foreign representative needed bankruptcy court approval under § 1521(a)(7) prior to bringing a foreign law based avoidance action. In British American Judge Kimball in a detailed analysis stated, inter alia, that "[s]ection 1509(b)(1) does not limit the right of a foreign representative to sue in a state or federal court in the United States to collect or recover a claim that is property of the debtor, a matter specifically addressed in section 1509(f) ... [n]or does section 1509 in any way limit the jurisdiction of any state or federal court to hear such a claim.” British Am., 2013 WL 765373, at *15 n. 18.
. With respect to § 1521(a)(7) relevant legislative history states that, "the exceptions in (a)(7) relate to avoiding powers ... This section does not expand or reduce the scope of relief currently available under sections 105 and 304 ...” H.R.Rep. No. 109-31, at 116. As discussed infra, former § 304(b) expressly permitted turnover as well as any other appropriate relief as guided by considerations of comity.
. No protections under § 1522 are required at this juncture to grant the foreign representatives authority to administer and realize upon the Offshore Funds’ assets within the territorial jurisdiction of the United States under § 1521(a)(5), given the broad powers granted them by the Cayman Court, and given that no assets are sought to be moved from the United States at this time. Moreover, this Court does not need to determine whether protections under § 1522 are required to grant the foreign representatives authority to distribute all or part of the Offshore Funds’ assets within the territorial jurisdiction of the United States under § 1521(b), as Petitioners have not requested § 1521(b) relief.
. Former § 304 provided that, “the court may'&emdash;order turnover of the property of such estate, or the proceeds of such property, to such foreign representative”; or order other appropriate relief. 11 U.S.C. § 304(b) (2000), repealed by Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPC-PA”) § 802(d)(3), 119 Stat. at 146.
. In authorizing turnover, former § 304(c) directed courts to consider:
what will best assure an economical and expeditious administration of such estate consistent with&emdash;
(1)just treatment of all holders of claims against or interests of such estate;
(2) protection of claim holders in the United States against prejudice and inconvenience in the processing of claims in such foreign proceeding;
(3) prevention of preferential or fraudulent dispositions of property of such estate;
(4) distribution of proceeds of such estate substantially in accordance with the order prescribed by this title;
(5) comity; and
(6) if appropriate, the provision of an opportunity for a fresh start for the individual that such foreign proceeding concerns.
11 U.S.C. § 304(c) (2000), repealed by BAPC-PA § 802(d)(3).
. Section 1507 provides:
(a) Subject to the specific limitations stated elsewhere in this chapter the court, if recognition is granted, may provide additional assistance to a foreign representative under this title or under other laws of the United States.
(b) In determining whether to provide additional assistance under this title or under other laws of the United States the court shall consider whether such additional assistance, consistent with the principles of comity, will reasonably assure—
(1)just treatment of all holders of claims against or interests in the debtor's property;
(2) protection of claim holders in the United States against prejudice and inconvenience in the processing of claims in such foreign proceeding;
(3) prevention of preferential or fraudulent dispositions of property of the debtor;
(4) distribution of proceeds of the debtor’s property substantially in accordance with the order prescribed by this title; and
(5) if appropriate, the provision of an opportunity for a fresh start for the individual that such foreign proceeding concerns.
11 U.S.C. § 1507.
. Section 1522 changed this concept from adequately protected to sufficiently protected to avoid confusion with other notions of adequate protection found in the Bankruptcy Code. See Clark, Chapter 15 § 7[2], n.41.
. Section 1505 provides, "[a] trustee or another entity [ ] may be authorized by the court to act in a foreign country on behalf of an estate created under section 541. An entity authorized to act under this section may act in any way permitted by the applicable foreign law.” 11 U.S.C. § 1505.
.To the extent any of these enacting countries allow turnover or a similar power to a person or body administering the reorganization or liquidation, a United States representative would potentially want access to those same powers, subject to the same conditions of protection of potentially affected parties required under Model Law Section 22.
Reference
- Full Case Name
- In re AJW OFFSHORE, LTD., Debtors in Foreign Proceedings
- Cited By
- 9 cases
- Status
- Published