CT Investment Management Co. v. Cozumel Caribe, S.A. de C.V. (In re Cozumel Caribe, S.A. de C.V.), 482 B.R. 96

Background

Cozumel Caribe filed a Mexican concurso proceeding; CTIM, as special servicer for the loan, seeks to recover funds in CTIM's Cash Management Account in New York.
A May 27, 2010 ex parte order (Precautionary Measures) in Mexico stayed transfers of funds and enforcement against Cozumel Caribe and related entities, including CTIM's account.
A $103 million loan, secured by a first-priority security interest, used lockbox accounts (Dollar and Peso) and a centralized Cash Management Account for funds.
CTIM stopped post-petition debt service for years; funds became commingled in the Cash Management Account, with separate subaccounts and reserves.
Recognition of the Mexican proceeding as a foreign main proceeding occurred under 11 U.S.C. § 1517, with a Recognition Order stating it would not automatically affect certain U.S. liens or enforcement rights absent further order.
CTIM filed an adversary to determine ownership of funds and application of the stay; the Foreign Representative moved for a comity-based stay pending resolution in Mexico.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Comity Ruling has preclusive effect.	CTIM contends comity precludes relitigation of May 27 Order effects.	Foreign Representative argues comity should limit CTIM's rights while Mexican proceedings proceed.	Court declines preclusion; shall determine comity anew.
Whether Section 1509 requires automatic comity after recognition.	CTIM argues comity to May 27 Order is mandatory post-recognition.	Foreign Representative contends comity is discretionary and time-limited.	Section 1509 provides access, not automatic relief; discretion remains.
Whether a stay under Chapter 15 should be granted under 1521(a)(7) for comity.	CTIM argues stay would impermissibly delay enforcement of U.S. rights.	Foreign Representative seeks stay to preserve assets while Quintana Roo Court resolves issues.	A stay is appropriate with conditions; CTIM sufficiently protected.
What forum should decide the reach and continuance of the Precautionary Measures.	CTIM argues U.S. court should decide enforcement rights in the Cash Management Account.	Quintana Roo District Court should resolve the Precautionary Measures and changed circumstances.	Quintana Roo District Court should decide; defer to foreign court for those issues.
What conditions should govern the stay.	No stay or minimal stay; CTIM should maintain rights in U.S. accounts.	Stay with conditions to resolve issues in Mexico and protect creditors.	Stay granted for 180 days with specific steps to determine applicability and modification of Precautionary Measures.

Key Cases Cited

Montana v. United States, 440 U.S. 147 (U.S. 1979) (collateral estoppel and res judicata principles)
Allen v. McCurry, 449 U.S. 90 (U.S. 1980) (collateral estoppel applicability)
Ball v. A.O. Smith Corp., 451 F.3d 66 (2d Cir. 2006) (elements of collateral estoppel in Second Circuit)
In re Koreag, Controle et Revision S.A. v. Refco F/X Assocs., Inc., 961 F.2d 341 (2d Cir. 1992) (bona fide ownership questions; comity framework)
Quigley Co., Inc. v. Law Offices of Peder G. Angelos (In re Quigley Co., Inc.), 676 F.3d 45 (2d Cir. 2012) (comity and bankruptcy stay timing)
Altos Hornos de México, S.A., v. Finanzas, 412 F.3d 424 (2d Cir. 2005) (deference to foreign proceedings; procedural fairness)
Atlas Shipping, Ltd. v. Salga, 404 B.R. 726 (S.D.N.Y. 2009) (comity discretionary relief and Model Law connections)
In re Maxwell Communications Corp., 93 F.3d 1036 (2d Cir. 1996) (comity as discretionary act of deference)
Hilton v. Guyot, 159 U.S. 113 (U.S. 1895) (classic comity principles)
In re Int’l Banking Corp. B.S.C., 439 B.R. 614 (S.D.N.Y. 2010) (interpretation of Model Law; direct access principles)
Cunard S.S. Co. Ltd. v. Salen Reefer Servs. AB, 773 F.2d 452 (2d Cir. 1985) (comity and section 304 precursor principles)