In Re Millennium Global Emerging Credit Master Fund Ltd.
458 B.R. 63
| Bankr. S.D.N.Y. | 2011Background
- Chapter 15 petitions filed by Bermuda liquidators seek recognition of Bermuda wind‑up as foreign main or foreign nonmain proceedings.
- Shareholders seek to use recognition to investigate U.S. parties, obtain discovery, and pursue distributions to creditors.
- Objectant argues Bermuda is not COMI or an establishment; GlobeOp’s issue withdrawn with non‑preclusive consent.
- Bermuda liquidations began in 2008 after a Credit Suisse margin call; provisional liquidators were appointed and committees of inspection formed.
- Funds were Bermuda‑based with a master/feeder structure; most management, assets, and investors were outside Bermuda, though Bermuda had local controls.
- Court must decide whether COMI or establishment was in Bermuda as of liquidation, determining main or nonmain recognition and related relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| COMI or establishment in Bermuda at commencement | Liquidators: COMI Bermuda; establishment supported by local directors and assets. | BCP: COMI not Bermuda; establishment not proven outside Bermuda. | COMI in Bermuda; thus Bermuda main proceeding. |
| Date to determine COMI/establishment | Use commencement date of Bermuda liquidation or petition date; balance favors Bermuda. | Some authorities use petition date; argues against retroactive shift. | COMI determined as of commencement; Bermuda remains COMI. |
| Effect of COMI finding on recognition level | Main proceeding recognition is proper to centralize assets and access U.S. relief. | If not main, nonmain recognition could suffice due to establishment in Bermuda. | Bermuda proceedings recognized as foreign main proceedings. |
| Existence of an establishment in Bermuda | Nontransitory economic activity and local presence constitute establishment. | No substantial Bermuda activity outside liquidation controls. | Establishment found; nonmain recognition alternative appropriate if main denied. |
| Adequacy of U.S. relief for recognized proceedings | Section 108 extensions and other relief should apply to aid liquidation. | Public policy and cost concerns may limit relief. | Relief under §108 and related provisions available to liquidators. |
Key Cases Cited
- In re Fairfield Sentry Ltd., 440 B.R. 60 (Bankr. S.D.N.Y. 2010) (COMI considerations and recognition in hedge fund windups; main vs nonmain guidance)
- Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., 374 B.R. 122 (Bankr.S.D.N.Y. 2007) (burden of proof on foreign reps; establishment vs COMI nuances)
- In re Ran, 607 F.3d 1017 (5th Cir. 2010) (COMI determined at liquidation/event date; protection of creditors)
- In re Betcorp Ltd., 400 B.R. 266 (Bankr. D. Nev. 2009) (COMI and establishment factors; ascertainability by third parties)
- Tri-Continental Exchange Ltd., 349 B.R. 627 (Bankr. E.D. Cal. 2006) (COMI principles and Model Law origins)
- In re SPhinX, Ltd., 351 B.R. 103 (Bankr. S.D.N.Y. 2006) (complex COMI/establishment considerations in offshore funds)