On June 14, 2010, the joint liquidators of Fairfield Sentry Ltd.—the largest Madoff “feeder fund”—filed a chapter 15 petition with the U.S. Bankruptcy Court for the Southern District of New York seeking recognition of the fund’s British Virgin Islands (BVI)-based insolvency proceedings.
One of the by-products of the Lehman insolvency is an increased focus on client money protection. The decision of Briggs J in the Lehman case concerning client moneys, reported as Lehman Brothers International (Europe) (in administration) v. CRC Credit Fund Limited & Ors, [2009] EWHC 3228, highlights a number of deficiencies in the current regime.
The Basel Committee on Banking Supervision may be most widely known as the originator of the “Basel Capital Standards,” “Basel II” and “Basel [III].” They provide guiding principles for capital for credit institutions (principally deposit-taking institutions) and related actors in the organized and regulated financial markets. The committee traces its origins largely to bank failures.
At one time, insolvency proceedings were primarily confined to one jurisdiction. However, in the age of expanding globalization, corporate insolvencies may now involve businesses and assets in multiple jurisdictions.
Recently, the US Bankruptcy Court for the Southern District of New York, in In re Metcalfe & Mansfield Alternative Investments, held that broad nondebtor, third-party releases previously approved as part of foreign restructuring proceedings under the Canadian Companies’ Creditors Arrangement Act (CCAA) where the restructuring plan was adopted by 96 percent of its creditors would be enforced in U.S.
The U.S. Bankruptcy Court for the District of Delaware recently granted recognition under chapter 15 of the Bankruptcy Code to the foreign liquidation proceedings of Saad Investments Finance Co. (No. 5) Ltd. (SIFCO 5).[1] The debtor is incorporated as an “exempted company” under the Cayman Companies Law.
On Aug. 21, 2009, the U.S. Bankruptcy Court for the Eastern District of New York issued a memorandum opinion in In re Gold and Honey, Ltd.[1]denying recognition of petitions filed by receivers appointed by the Tel-Aviv-Jaffa District Court for the State of Israel.
In CSL Australia Pty. Ltd. v. Britannia Bulkers PLC, et al., 2009 U.S. Dist. LEXIS 81173 (S.D.N.Y. Sept. 8, 2009), the defendant Britannia Bulkers PLC (Britannia), a Denmark corporation with its only place of business in Svendborg, Denmark, filed a motion against the plaintiff CSL, an Australian corporation with its place of business in St. Leonard’s, New South Wales, Australia, to vacate a maritime attachment issued in favor of CSL.
In In re Atlas Shipping A/S, 404 B.R. 726 (Bankr. S.D.N.Y. 2009), the U.S. Bankruptcy Court for the Southern District of New York vacated maritime attachments and ordered the turnover of funds in New York to the foreign representatives of a shipping company that was in bankruptcy in Denmark. The U.S.
Jurisdictional battles are not inevitable when assets and liabilities span borders. Notwithstanding some criticism of the rigid application of standards, chapter 15 of the U.S. Bankruptcy Code has proved to be a flexible and effective tool for cross-border restructuring since its enactment in 2005.[1] A popular misconception is that a chapter 15 ancillary case is not a realistic option for a corporate group with a material U.S.
