560 B.R. 650
Bankr. S.D.N.Y.2016Background
- IEBA is an Argentine holding company whose principal asset is EDEA, an electricity distributor serving ~513,000 customers in the Province of Buenos Aires; IEBA’s operations and governance are centered in Argentina.
- IEBA previously restructured in 2007 and issued Series C and D “Old Notes,” which are unsecured except for small share pledges and a commercial guarantee for interest.
- Due to tariff constraints and reduced revenues, IEBA defaulted on coupon payments beginning December 26, 2014, and negotiated a new restructuring via an acuerdo pre-ventivo extrajudicial (APE) under Argentine Bankruptcy Law.
- The Argentine Court entered a Homologation Order approving the APE on September 8, 2016; IEBA consummated transactions with consenting noteholders on September 26, 2016 and sought Chapter 15 recognition the next month to complete implementation in the U.S.
- IEBA holds U.S. connections: an escrow of unclaimed Old Notes at BNY Mellon in New York, cash at a New York Barclays branch, and Old Notes governed by New York law with a New York forum selection clause; BNY Mellon requires a U.S. court order to exchange the notes.
- The Foreign Representative (Jaime Javier Barba) filed an uncontested Chapter 15 petition seeking recognition of the Argentine main proceeding, enforcement of the Homologation Order and injunctive and ministerial relief to implement the APE in the U.S.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Argentine APE is a "foreign proceeding" and the Argentine court-appointed representative qualifies | Barba: APE is court‑supervised insolvency under Argentine law; Barba is authorized foreign representative and supplied required filings | No opposition | Court: APE and Barba meet definitions of foreign proceeding and foreign representative under §§101(23), 101(24) and §1515; recognition proper |
| Whether the proceeding is a "foreign main proceeding" (center of main interests) | Barba: IEBA’s COMI is Argentina—the registered office, management, primary assets, operations, and creditors are in Argentina | No opposition | Court: COMI is Argentina; foreign proceeding is a foreign main proceeding under §1517(b) |
| Whether U.S. jurisdiction and venue exist for Chapter 15 recognition | Barba: IEBA has U.S. property and ties—dollar deposits, escrow, New York‑law debt and forum clause—sufficient under Barnet and related precedent | Potential creditors/ intermediaries not contesting jurisdiction | Court: U.S. property and New York‑governed obligations provide adequate basis for jurisdiction and venue (citing Barnet, Berau, Octaviar) |
| Whether U.S. courts should grant discretionary relief to enforce the APE/Homologation Order and restrain U.S. actions | Barba: Enforcement promotes comity, centralizes disputes, allows U.S. intermediaries to perform ministerial acts, and protects the APE’s distribution scheme | No opposition | Court: Under §§1520, 1521 court grants relief — enforces APE and Homologation Order, enters injunction against U.S. actions inconsistent with them, and directs U.S. intermediaries to carry out ministerial duties |
Key Cases Cited
- Drawbridge Special Opportunities Fund LP v. Barnet (In re Barnet), 737 F.3d 238 (2d Cir. 2013) (Chapter 15 §109(a) jurisdictional standard and property sufficient for eligibility)
- Morning Mist Holdings Ltd. v. Krys (In re Fairfield Sentry Ltd.), 714 F.3d 127 (2d Cir. 2013) (factors for determining center of main interests)
- In re Bear Stearns, 374 B.R. 122 (Bankr. S.D.N.Y. 2007) (presumption of COMI at place of registration and factors to rebut presumption)
- In re Berau Capital Res. Pte Ltd., 540 B.R. 80 (Bankr. S.D.N.Y. 2015) (U.S. bank deposits and New York‑governed obligations as basis for jurisdiction in Chapter 15)
- In re Octaviar Admin. Pty Ltd., 511 B.R. 861 (Bankr. S.D.N.Y. 2014) (Chapter 15 jurisdictional analysis regarding U.S. property)