Enforcement of an Insolvency-Related Judgment Does Not Require Recognition under Chapter 15
The U.S. District Court for the Southern District of New York summarily rejected a longstanding principle that recognition of a foreign bankruptcy proceeding under Chapter 15 of the U.S. Bankruptcy Code is a prerequisite to the enforcement by a U.S. court of a judgment entered in a foreign bankruptcy proceeding. The authors of this article discuss the court’s decision and the implications.
In EMA GARP Fund v. Banro Corporation (the “U.S. Action”), the U.S. District Court for the Southern District of New York dismissed a lawsuit filed by shareholders of an insolvent Canadian company, Banro Corporation (“Banro”), and its former CEO, finding that, under the principles of comity, an approved Canadian plan of reorganization released all claims against the defendants. In so ruling, the court summarily rejected a longstanding principle that recognition of a foreign bankruptcy proceeding under Chapter 15 of the U.S. Bankruptcy Code is a prerequisite to the enforcement by a U.S. court of a judgment entered in a foreign bankruptcy proceeding.
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“Enforcement of an Insolvency-Related Judgment Does Not Require Recognition under Chapter 15,” by Michael B. Schaedle and Evan J. Zucker was published in the February/March 2020 edition of Pratt's Journal of Bankruptcy Law (Volume 16, Number 2), an A.S. Pratt Publication, LexisNexis. Reprinted with permission.
This article was first published in the November 2019 edition of Mainbrace, Blank Rome's quarterly maritime newsletter.