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The Brazilian Bankruptcy Law — enacted in February 2005 — has not adopted the UNCITRAL Model Law regarding transnational insolvency. In fact, Brazilian law is laconic in this regard and only says that the court of the place where the debtor has its main establishment or where the branch of a foreign company is located is the competent court to grant judicial reorganization or to declare the debtor bankrupt (art. 3º). Such legal provision is evidently insufficient to deal with as complex an issue as transnational bankruptcy and judicial reorganization.
For the Cayman Islands insolvency community, 2017 could fairly be called the Year of the Redeeming Shareholder. The Judicial Committee of the Privy Council, the ultimate appeal court for Cayman and several other important offshore jurisdictions, delivered two judgments originating from the Cayman Islands this past year. Both cases involved litigation between court-appointed liquidators of insolvent hedge funds and investors in those funds who had redeemed their shares in the fund before the liquidations.
Weeks before Hanjin Shipping sought protection from its creditors in Korea, I got an unexpected call: “Tally, I think one of the world’s largest shipping companies is going to file for bankruptcy in Korea and seek chapter 15 protection in New York, are you up for being my local counsel?” This was in early August 2016, and my life has not been the same since.
This article addresses foreign discovery pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and the application of the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (the “Hague Convention” or the “Convention”) to such discovery. It concludes that discovery under the Hague Convention, including Bankruptcy Rule 2004 discovery, may end up being a drawn-out and difficult process.
Since the seminal decision of the Ontario Court of Appeal in Metcalfe & Mansfield Alternative Investment II Corp. (“Metcalfe”) in 2008, third party releases have been part of the restructuring landscape. Metcalfe involved the asset back commercial paper crisis that resulted from the financial crisis of 2007-2009. A plan of compromise or arrangement under the Companies’ Creditors Arrangement Act (“CCAA”) was put to creditors that involved a release of creditor claims against the debtors and also against certain non-filing third parties.
More than a decade after chapter 15 was added to the Bankruptcy Code,[1] there has been an influx of large, complex cases brought by foreign representatives in the U.S. Bankruptcy Court. The number of chapter 15 cases initiated in 2016 rivals the number of cases commenced as a result of the economic crisis in 2009, and many of the current cases are some of the largest and most complex chapter 15 cases filed to date.[2]
