In Re British American Isle of Venice (BVI), Ltd.
441 B.R. 713
| Bankr. S.D. Florida | 2010Background
- Debtor is British American Isle of Venice (BVI) Ltd., a BAICO subsidiary formed to invest in US real estate.
- Petition for recognition of a foreign main proceeding filed under 11 U.S.C. §§ 1504, 1517.
- BVI Proceeding is pending in the Eastern Caribbean Supreme Court, High Court of Justice, Commercial Court (British Virgin Islands) under the Insolvency Act.
- Case management: Casey McDonald appointed provisional liquidator on Oct. 28, 2009, and liquidator on Feb. 15, 2010; BVI Court supervises the liquidation.
- Green Island Holdings, LLC, a creditor, objects to recognition and seeks protections; Petitioner seeks recognition and related relief under Chapter 15.
- At petition stage, Debtor owned 100% of four BVI entities and 100% of three US entities, with assets largely in the BVI and in US real estate via subsidiaries.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the BVI Proceeding is a foreign main proceeding under COMI | Green Island contends COMI may not be in the BVI due to conflicts and management | Petitioner asserts COMI lies in the British Virgin Islands; management controlled by Petitioner in the BVI | Yes; COMI located in the British Virgin Islands; recognition granted |
| Whether the petition satisfies §1517 and §101(23) to constitute a foreign proceeding | Green Island argues proceedings are not properly collective or in a foreign forum | Petitioner shows BVI Proceeding is collective, judicial, in a foreign country, under insolvency law, with assets under foreign court control | Proceeded; BVI Proceeding qualifies as a foreign proceeding under §101(23) and §1517 |
| Whether §1506 public policy exception bars recognition due to conflicts of interest | Conflicts of interest between Petitioner and BAICO undermine fairness | Conflicts are not inherently intolerable; other protections exist under Chapter 15 | Public policy exception not invoked; recognition permitted with protections under Chapter 15 |
| Whether recognition would impair U.S. rights or require severing comity protections | Conflicts could hinder U.S. bankruptcy policies | Chapter 15 includes mechanisms (e.g., §1522) to tailor relief to protect interests | Recognition does not severely impinge U.S. rights; tailored relief available |
| What relief, if any, should follow recognition under §1521 | [Not stated as a separate position in opinion] | Court to consider relief at a subsequent hearing | Recognition granted; non-evidentiary hearing to address §1521 relief |
Key Cases Cited
- In re British Am. Ins. Co., 425 B.R. 884 (Bankr.S.D.Fla. 2010) (framework for COMI and Chapter 15 recognition analysis)
- In re British Am. Ins. Co., 425 B.R. 902 (Bankr.S.D.Fla. 2010) (collective nature and notice/claims framework under Act)
- Fairfield Sentry Ltd., 440 B.R. 60 (Bankr.S.D.N.Y. 2010) (COMI analysis and foreign proceeding recognition considerations)
- Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., 374 B.R. 122 (Bankr.S.D.N.Y. 2007) (COMI factors and foreign proceeding recognition)
- In re Qimonda AG Bankr. Litig., 433 B.R. 547 (E.D. Va. 2010) (public policy and comity considerations in Chapter 15)
- In re Tri-Continental Exch. Ltd., 349 B.R. 627 (Bankr.E.D. Cal. 2006) (multifactor COMI approach for COMI determination)