A Singapore entity who had entered into a joint venture with an Indonesian entity brought suit in Singapore. The Indonesian entity owned shares in an Australian company. The Singapore entity made an ex parte application to the Supreme Court of Western Australia ("Supreme Court") to freeze the shareholding interests. The court granted the application, but the Court of Appeal dismissed the freezing order. The High Court reversed.
Courts have held that the Bankruptcy Code's avoidance powers do not apply extraterritorially, SIPC v. Bernard L Madoff Inv. Sec. LLC ("Madoff"),480 B.R. 501 (Bankr. S.D. N.Y. 2012); Barclay v. Swiss Fin. Corp Ltd., 347 B.R. 708 (Bankr. C.D. Cal. 2006); Societe Generale plc v. Maxwell Commc'n Corp plc "Maxwell I"),186 B.R. 807 (S.D.N.Y. 1995) and others have found to the contrary, Weisfelner v. Blavatnik (In re Lyondell),543 B.R. 127 (Bankr. S.D.N.Y. 2016); Sec. Investor Prot. Corp. v. BLMIS (In re BLMIS) , 513 B.R. (S.D.N.Y.
In a recent unreported decision, ENRC NV v. Zamin Ferrous Limited (2015) JRC 217, the Jersey Royal Court demonstrated its consent to ensuring that judgment creditors can enforce their judgments worldwide. In this case, the judgment creditor applied for an ex-parte order to freeze assets and to compel the judgment debtor to answer questions about its assets and assets held by its subsidiaries. The answers revealed two agreements had been entered into pursuant to which certain assets held by subsidiaries had been transferred to third parties.
The Bankruptcy Appellate Panel for the 9th Circuit in Chantel v. Pierce, 2015 Bankr. Lexis 2174, recently explained what can constitute a sham trust to enable creditors to reach assets transferred to that trust. A California trust had been created with the Chantels as co-trustees. After a judgment had been entered against them, they filed a Chapter 13 bankruptcy, which was converted to a Chapter 7. In their schedules, the Chantels claimed they owned no real property and had not made any transfers to their self-settled trust within the previous 10 years.