Fairfield Sentry Ltd. v. Theodoor GGC Amsterdam (In Re Fairfield Sentry Ltd.)
452 B.R. 64
Bankr. S.D.N.Y.2011Background
- Debtors Fairfield Sentry Ltd., Fairfield Sigma Ltd., and Fairfield Lambda Ltd. filed chapter 15 petitions in SDNY recognizing BVI proceedings; foreign liquidators Lau, Krys, and Stride are appointed as Foreign Representatives.
- There are approximately 209 Redeemer Actions in this district seeking the return of Redemption Payments and fictitious profits from Madoff-related transfers, now amended to include BVI Avoidance Claims.
- Actions were initially removed from New York State court to this court under 28 U.S.C. § 1452 and consolidated for pretrial/discovery; the BVI Avoidance Claims were added in amendments after removal.
- The Foreign Representatives’ efforts aim to maximize the BVI estate by centralizing related actions before a single court familiar with the underlying facts and the BVI proceedings, consistent with chapter 15 goals.
- District Court had denied withdrawal of the reference; the Remand Motions seek remand or abstention, which this court denies to preserve efficient, uniform administration of the estates and avoid duplicative proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Court has core jurisdiction over the Actions under §157(b)(2)(P). | Foreign Representatives argue core authority exists to adjudicate BVI Avoidance Claims. | Movants contend the Actions are not core and should be remanded. | Yes; court finds core jurisdiction under §157(b)(2)(P). |
| Whether the Court has related-to jurisdiction over the Actions. | Recovery benefits the BVI estate and related proceedings. | Relies on non-core status to challenge jurisdiction. | Yes; court holds related-to jurisdiction under §1334 is satisfied. |
| Whether equitable remand or permissive abstention apply. | Remand/abstention should conserve comity and state-law procedures. | Remand or abstention would better serve state forums and avoid federal overreach. | Unavailing; equitable remand and permissive abstention denied. |
| Whether mandatory abstention applies under §1334(c)(2). | Abstention required due to state-law basis and timing. | Abstention appropriate if state forum can adjudicate timely. | Unavailable; mandatory abstention denied. |
| Timeliness of removal under Bankruptcy Rule 9027; 90-day vs 30-day rule. | Rule 9027 governs; post-petition and pre-petition actions timely removed. | Some actions untimely removed; exceptions potentially excusable. | Majority: Rule 9027 governs; most removals timely; four post-petition actions untimely but allowed to proceed for efficiency. |
Key Cases Cited
- In re Fairfield Sentry Ltd., 440 B.R. 60 (Bankr.S.D.N.Y. 2010) (recognition and chapter 15 ancillary framework; centralized administration)
- In re Condor Ins. Ltd., 601 F.3d 319 (5th Cir. 2010) (chapter 15 permits foreign avoidance relief; core jurisdiction)
- Atlas Shipping A/S, 404 B.R. 726 (Bankr.S.D.N.Y. 2009) (broad discretionary relief under chapter 15; centralization)
- Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., 389 B.R. 325 (S.D.N.Y. 2008) (comity and discretionary relief in chapter 15)
- United States Lines, Inc., 197 F.3d 631 (2d Cir. 1999) (core vs non-core proceedings; broad interpretation of core)