Drawbridge Special Opportunities Fund LP v. Barnet
737 F.3d 238
| 2d Cir. | 2013Background
- OA was liquidated in Australia after external administration orders, with OA’s center of main interests in Australia.
- Australian affiliates of Drawbridge were sued in Australia for AUD 210,000,000, prompting cross-border scrutiny.
- Foreign Representatives petitioned in Aug 2012 for recognition of OA’s liquidation as a foreign main proceeding under Chapter 15.
- Drawbridge objected to recognition; the Bankruptcy Court granted the Recognition Order in Sept 2012 and Drawbridge appealed.
- The Bankruptcy Court certified direct appeal; discovery disputes followed, with a discovery order issued in Dec 2012 and stays entered.
- This appeal addresses whether 11 U.S.C. § 109(a) applies to a debtor in a Chapter 15 proceeding, and whether the discovery order is reviewable, leading to a holding that §109(a) applies and the matter is remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does §109(a) apply to a Chapter 15 debtor? | Drawbridge: OA must satisfy §109(a) as a debtor under this title. | Foreign Representatives: OA isn’t a Chapter 11 debtor; §109(a) not required for Chapter 15. | Yes; §109(a) applies to the Chapter 15 debtor. |
| Is the discovery order appealable and does it review the Recognition Order? | Discovery order harms Drawbridge’s interests and should be reviewable. | Standing and appealability are limited; discovery orders are generally not appealable. | Discovery order is appealable and may review the Recognition Order; premature notices can ripen. |
Key Cases Cited
- In re DBSD N. Am., Inc., 634 F.3d 79 (2d Cir. 2011) (standards for standing and appellate review in bankruptcy)
- In re Gucci, 126 F.3d 388 (2d Cir. 1997) (pecuniary harm test for standing in bankruptcy appeals)
- In re Fairfield Sentry Ltd., 714 F.3d 127 (2d Cir. 2013) (interpretation of Chapter 15 and related provisions)
- In re Zarnel, 619 F.3d 156 (2d Cir. 2010) (standing and injury-in-fact in bankruptcy appeals)
- Community Bank, N.A. v. Riffle, 617 F.3d 171 (2d Cir. 2010) (premature notices of appeal and ripening to final appeal)
- Smith v. Barry, 502 U.S. 244 (1992) (liberal construction of notices of appeal (Rule 3 standards))
- Berlin v. Renaissance Rental Partners, LLC, 723 F.3d 119 (2d Cir. 2013) (premature notices of appeal and review of final judgments)