Chapter 15: A More Efficient Path for Recognition of Foreign Judgments as Compared with Adjudicatory Comity( continued from page 14)
The Bankruptcy Court’ s analysis primarily focused on the third and fourth factors of the Philadelphia Gear test, determining that it was clear that the first factor was met because the Singapore Liquidation Proceeding is parallel to the Chapter 15 Case and that the second factor did not apply as there was no pending plan. The third inquiry was also satisfied for the same reasons detailed above for the Singapore insolvency laws being substantially similar to U. S. insolvency laws. The fourth inquiry— whether the party opposing comity is prejudiced by being required to participate in the foreign proceeding— was satisfied for the same reasons stated for Section 1507.
In recognizing and enforcing the Singapore Turnover Order, the Bankruptcy Court overruled Vertiv’ s opposition finding it rests on an“ unacceptable premise” that the Bankruptcy Court should stand in appellate review of a foreign court. Such an act would directly conflict with principles of comity and the objectives of Chapter 15. The Bankruptcy Court noted that this is especially true where the party maintains the capacity to pursue appeals and other necessary relief from the foreign court.
Implications Adjudicatory comity and Chapter 15 both aim to facilitate cooperation and coordination in cross-border insolvency cases. Indeed, Chapter 15 specifically incorporates comity and international cooperation into a court’ s analysis, as Chapter 15 requires that a“ court shall cooperate to the maximum extent possible with a foreign court.” In deciding whether to use adjudicatory comity and / or Chapter 15 it is important to consider the ultimate objective and the cost- benefit analysis of each approach. While seeking comity defensively in a U. S. litigation, without Chapter 15 relief, is possible, it can lead to inconsistent and unpredictable outcomes. Additionally, the multiple factors involved in applying adjudicatory comity can led to protracted discovery and, concomitantly, delaying recognition. By contrast, the Bankruptcy Court’ s recent analysis demonstrates that the existing Chapter 15 framework, along with the well- established case law interpreting Chapter 15, provides an effective, reliable, and efficient tool for recognition and enforcement of foreign orders. That is particularly true, whereas here, a party seeks multiple forms of relief. p – 2025 BLANK ROME LLP
Vertiv appealed the Bankruptcy Court’ s decision to the District Court, and the appeal is still pending.
1. Michael B. Schaedle & Evan J. Zucker, District Court Enforces German Stay, Ignoring Bankruptcy Code’ s Chapter 15, 138 The Banking Law Journal 483( LexisNexis A. S. Pratt 2021).
2. Id. 3. Id.
4. Vertiv, Inc. v. Wayne Burt Pte, Ltd., No. 3:20-CV-00363, 2022 WL 17352457( D. N. J. Nov. 30, 2022), vacated and remanded, 92 F. 4th 169( 3d Cir. 2024).
5. Vertiv, Inc. v. Wayne Burt PTE, Ltd., 92 F. 4th 169( 3d Cir. 2024). 6. Id. at 176. 7. Philadelphia Gear Corp. v. Philadelphia Gear de Mexico, S. A., 44 F. 3d 187, 194( 3d Cir. 1994)). 8. Wayne Burt PTE, Ltd., 92 F. 4th at 180. 9. Id.
10. See Vertiv’ s Brief in Opposition to Motion for Recognition of Foreign Proceedings and Motion to Compel Turnover of Cetex Shares, Case No.: 24-196-MBK, Doc. No. 29, at 10-14( D. N. J October 29, 2024).
11. Id. at 13. 12. In Re: Wayne Burt Pte. Ltd.( In Liquidation), Debtor., No. 24-19956( MBK), 2024 WL 5003229( Bankr. D. N. J. Dec. 6, 2024).
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