489 B.R. 346
Bankr. S.D.N.Y.2013Background
- Petition for recognition of a London bankruptcy case (Paul Kemsley) as a foreign main or nonmain proceeding under chapter 15; COMI and establishment issues central to recognition.
- Debtor resided in the United States (Florida, New York, California) with UK ties; UK proceeding commenced January 13, 2012; petition filed August 21, 2012.
- Debtor’s family moved internationally, including children in London, creating complex COMI considerations and undermining a UK habitual residence,
- Trustee seeks recognition; Barclays challenges COMI in the UK; potential automatic stay consequences and asset protection concerns motivate the dispute.
- Court ultimately finds COMI in the United States as of the UK proceeding filing date; UK proceeding not a foreign main or foreign nonmain proceeding; petition denied.
- Key factors include proximity to children, multiple US residences, and lack of established UK operations; formation of a UK establishment not proven.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| COMI determination date for individual debtor | Fry argues COMI remains in the UK | Kemsley contends COMI moved with him | COMI judged as of filing date of foreign proceeding (UK filing) |
| Whether COMI was in the United States at commencement | UK proceeding should reflect COMI in the UK | COMI centered in US due to family and residency | COMI in the United States at commencement of UK proceeding |
| Whether UK proceeding is a foreign main proceeding | UK proceeding should be recognized as main | No UK center of main interests; habitual residence in US | UK proceeding not a foreign main proceeding |
| Whether UK proceeding qualifies as a foreign nonmain proceeding (establishment) | Possible establishment in London via office use | No regular establishment or nontransitory economic activity in UK | No establishment; UK proceeding not a foreign nonmain proceeding |
Key Cases Cited
- In re Ran, 607 F.3d 1017 (5th Cir. 2010) (COMI analysis date and habitual residence considerations)
- Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., 389 B.R. 325 (S.D.N.Y. 2008) (foreign proceeding recognition standards)
- Millennium Global Credit Master Fund Ltd., 458 B.R. 63 (Bankr.S.D.N.Y. 2011) (COMI analysis and date selection)
- Gerova Financial Group, Ltd., 482 B.R. 86 (Bankr.S.D.N.Y. 2012) (COMI determination timing for chapter 15)
- In re Loy, 380 B.R. 154 (Bankr.E.D. Va. 2007) (objective criteria for COMI factors)
- In re SPhinX, Ltd., 351 B.R. 103 (Bankr.S.D.N.Y. 2006) (objective factors for corporate COMI applicability to individuals)