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* In re Oversight & Control Comm'n of Avanzit, S.A., 385 B.R. 525 (Bankr. S.D.N.Y. Apr. 2008) (Bernstein, J.)
Spain's insolvency laws73 are not so different from ours: confirmation of a plan does not end the case or the court's jurisdiction. As part of the debtor's 2004 convenio,74 or payment plan, an oversight commission was created to act as a representative of creditors. Before the approval of the convenio, however, the debtor was embroiled in a dispute with a Peruvian bank over the bank's setoff rights with respect to a $25 million time deposit account which was held in the United States and governed by New York law. While an appeal was pending before a Peruvian court, the oversight commission went before the Spanish Insolvency Court and sought permission to commence a chapter 15 case in the United States to administer the time deposit account (since, after all, the account was held in America and governed by New York law). The Spanish court gave the commission its blessing, and so the commission commenced the present case and sought recognition of the Spanish case as a foreign main proceeding under chapter 15. The Peruvian bank moved to dismiss the American case and to decline recognition, arguing that the Spanish court's approval of the convenio ended the Spanish insolvency case and thus the Spanish Insolvency Court's jurisdiction over the time deposit account as well. Judge Bernstein disagreed. He compared the convenio to a chapter 11 plan. A chapter 11 case, like a Spanish insolvency case, remains pending after plan confirmation, until the court closes the case by the entry of a final decree. Similarly, in Spain, the SOPA case remains open until an order is entered formally closing the case and resolving other administrative matters. Accordingly, the court denied the bank's motion to dismiss, concluded that the oversight commission was a "foreign representative," and recognized the SOPA case as a foreign main proceeding such that the commission could commence the present chapter 15 case to administer the time deposit account under the terms of the convenio.
* In re Ernst & Young, Inc., as Receiver of Klyties Developments, Inc. et al., 383 B.R. 773 (Bankr. D. Co. Feb. 2008) (Romero, J.)
Colorado bankruptcy court, applying the Bear Stearns factors,75 recognized a Canadian receivership proceeding as a foreign main proceeding. COMI determinations are factintensive, said the court. In this case, a Canadian corporation (KDI), the majority of which was owned and operated by two Israeli citizens residing in Calgary, Alberta (the Friedmans), defrauded investors in the United States, Canada, and Israel out of some $7.6 million. Once the Friedmans admitted to fraud and settled with Canadian authorities, a Canadian court appointed
73
In 2003, the Insolvency Act repealed the 1922 Suspension of Payments Act (the "SOPA"). Because Avanzit's case commenced pre-2003, however, SOPA applied to Avanzit's case.
74
A convenio is a payment plan, which (as Judge Bernstein determines here) is not so unlike a chapter 11 plan of reorganization or liquidation.
75
According to the Colorado bankruptcy court, these "BS factors" include: (1) the location of those who manage the debtor; (2) the location of the debtor; (3) the location of the debtor's primary assets; (4) the location of the majority of the debtor's creditors or the majority of the creditors affected by the case; and (5) the jurisdiction whose law would apply to most disputes. Id. (citing In re Bear Stearns, 374 B.R. at 128).
