MEMORANDUM OPINION AND ORDER GRANTING FOREIGN REPRESENTATIVE’S MOTION FOR ADDITIONAL RELIEF
The Court in this case is asked to vacate nine Supplemental Rule B maritime attachments obtained in the United States District Court for the Southern District of New York by foreign creditors of Atlas Shipping A/S and Atlas Bulk Shipping AS (together “Atlas”), two Danish corporations that are debtors in a bankruptcy proceeding in Denmark and, through their foreign representative, petitioners in a Bankruptcy Code chapter 15 proceeding in this Court. The Court is also asked to entrust the garnished funds to the foreign representative for administration in the Danish bankruptcy proceeding. The maritime attachments were issued in support of arbitrations commenced by Atlas’ creditors in London pursuant to provisions of applicable maritime charters.
Under the former Bankruptcy Code § 304 regime for ancillary U.S. bankruptcy proceedings, case law clearly supports granting a foreign representative the relief sought here. The objecting foreign creditors argue that under the new chapter 15 regime, the relief sought could only be granted if the foreign representative also commenced a case under chapters 7 or 11. For the reasons explained below, the Court rejects the creditors’ arguments and concludes, consistent with principles of comity, that the Supplemental Rule B attachments should be vacated pursuant to Bankruptcy Code §§ 1521(a)(5) and 1521(b), and the garnished funds turned over to the foreign representative subject to administration in the Danish bankruptcy proceeding.
BACKGROUND
Atlas is an international shipping company based in Copenhagen, Denmark. On December 17, 2008, Atlas filed a bankruptcy petition in Denmark, and was declared a bankrupt by the Danish court on December 18, 2008. The Danish court then appointed Lisa Bo Larsen and Michael Ziegler as trustees of Atlas. Under Danish law, once Atlas was declared bankrupt, all of Atlas’ assets vested in the trustees. Danish law also provides for a stay — similar to the automatic stay under the U.S. Bankruptcy Code — of all proceedings involving Atlas. Finally, Danish law provides that all existing attachments lapse upon commencement of the bankruptcy, and no further attachments may be levied against the company’s assets.
Between early November 1 and late December 2008, a number of Atlas’s alleged creditors sought and obtained Rule B attachments against Atlas’ funds found in banks in New York. The dates and attaching parties are as follows:
DATE ATTACHING PARTY
November 3, 2008 Dormin Shipping_
November 13, 2008 Limankoy_
December 18, 2008 Amanda Navigation
December 19, 2008 Sertio Shipping
*731 December 22, 2008 Allied Maritime_
December 22, 2008 New Era Shipping
December 22, 2008 Cargill International
December 23, 2008 Peninsula Petroleum
December 29, 2008 Malena Shipping
As a result of these attachments, approximately $4.3 million of Atlas’ funds were restrained. None of the above creditors is based in the United States. The first two attachments were obtained before the Danish bankruptcy proceeding was commenced; the remaining seven attachments were obtained after the Danish bankruptcy was commenced. While the legal analysis of the validity of the attachments differs depending on whether the attachments were obtained before or after the Danish bankruptcy commenced, the result here is the same — namely, all of the attachments shall be vacated and the funds entrusted to the foreign representative for administration in the Danish bankruptcy proceeding.
On January 23, 2009, Lisa Bo Larsen, the duly-appointed foreign representative of Atlas filed chapter 15 petitions (now jointly administered) in this Court. On January 27, 2009, the Court granted provisional relief pursuant to Bankruptcy Code § 1519(a) pending the recognition hearing. (ECF Docs. # 7, 8.) The provisional relief required that the garnished funds be turned over to the foreign representative’s U.S. counsel, to be held in escrow pending determination of the parties’ respective rights in those funds. On February 20, 2009, the Court granted recognition of the Danish proceeding as a foreign main proceeding pursuant to Bankruptcy Code § 1517. (ECF # 22.) During the recognition hearing, no creditors objected to recognition of the Danish bankruptcy proceeding as a foreign main proceeding, but several creditors — including the two objecting creditors here, Dormin Shipping and Allied Maritime (the “Objecting Creditors”) — objected to the request of Atlas’ foreign representative for additional discretionary relief pursuant to § 1521 to vacate the attachments and turn the es-crowed funds over to the representative to be administered in the Danish bankruptcy proceeding. The Objecting Creditors argued that the attachments could be vacated only if Atlas’ foreign representative first commenced a case under chapters 7 or 11 of the Bankruptcy Code, and then commenced and obtained judgment in an avoidance action under § 547. 2 The Court directed further briefing on the issues and scheduled a further hearing for March 25, 2009.
DISCUSSION
A Maritime Attachment Liens
The maritime attachment lien is an ancient device that predates the grant of general admiralty jurisdiction to federal courts and that the Rules Enabling Act formalized in the admiralty rules. Maritime attachment liens are now governed by Rule B of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions to the Federal Rules of Civil Procedure (“Supplemental Rules”).
Historically, Rule B attachments served two purposes: (1) they ensured satisfaction if a suit against the shipping company is ultimately successful; and (2) they ensured a defendant’s appearance in an action.
Aurora Maritime Co. v. Abdullah
*732
Mohamed Fakem & Co.,
Under Supplemental Rule B, a plaintiff may obtain an order of attachment against a defendant’s property that is in the hands of a garnishee. Fed.R.Civ.P. Supp. R. B(l)(a). Once the property has been restrained, Supplemental Rule E(4)(f) provides the defendant with an opportunity to appear before the court to contest the attachment. Fed.R.Civ.P. Supp. R. E(4)(f). Rule E(4)(f) does not by itself establish the test a district court should apply in vacating a Rule B attachment. The Second Circuit, adopting the practice in the Southern and Eastern Districts of New York (embodied in former Local Rule 12), has set out standards for issuing and then vacating maritime attachments.
Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd.,
In more recent times, litigants have deployed Rule B attachments to attach bank credits used in electronic fund transfers (“EFTs”) to or from parties absent from the jurisdiction.
Aqua Stoli,
All nine attachments here were obtained before the chapter 15 petitions were filed in this Court. Neither Atlas nor the foreign representative sought to vacate the Rule B attachments in the district court under Rule E(4)(f).
B. Granting Comity to Foreign Proceedings under § SOI of the Old Code
In 2005, Congress adopted chapter 15 of the Bankruptcy Code, which is based on
*733
the Model Law on Cross-Border Insolvency promulgated by the United Nations Commission on International Trade Law in 1997. Chapter 15 replaced § 304, which originally provided the statutory framework for cases filed in the United States that are ancillary to insolvency proceedings filed in foreign countries. The philosophies underlying former § 304 were deference to the foreign proceeding and the prevention of the piecemeal distribution of the debtor’s estate.
See Bank of New York & JCPL Leasing Corp. v. Treco (In re Treco),
“Federal courts generally extend comity whenever the foreign court had proper jurisdiction and enforcement does not prejudice the rights of United States citizens or violate domestic public policy.”
See Victrix S.S. Co., S.A. v. Salen Dry Cargo A.B.,
The foreign representative argues that this Court should grant comity to the Danish bankruptcy proceeding by applying provisions of the Danish Bankruptcy Act that, according to the foreign representative, would dissolve all pre- and post-petition attachments as a matter of law. The foreign representative (1) filed a notice of intent to rely on foreign law (pursuant to Federal Rule of Civil Procedure 44.1), stating her intention to rely on a portion of the Bankruptcy Act of the Kingdom of Denmark (see ECF Doc. # 19), (2) provided the Declaration of Trustee Lisa Bo Larsen, dated March 3, 2009, setting forth her opinion about the content and effect of Danish law regarding the attachments (see ECF Doc. #23, Supplement Declaration of Lisa Bo Larsen), and (3) attached a portion of the Act (in Danish) and a certified English translation (Id., Exs. A & B).
Sections 31(1) and 31(3) of the Danish Bankruptcy Act provide as follows:
31. — (1) Upon pronouncement of adjudication order execution by way of distress or attachment shall not be levied against the assets comprised by the bankruptcy.
*734 31. — (3) Any attachments made before the bankruptcy shall lapse.
Id., Ex. B.
The foreign representative also attached a letter addressed to the Court from Judge Torben Kuld Hansen, the presiding judge over the Danish proceeding. Judge Hansen wrote:
As presiding judge in the bankruptcy proceeding of Atlas Shipping A/S and Atlas Bulk Shipping AS (jointly referred to as “Atlas”), which proceedings were commenced by this court on 18 December 2008 (the “Bankruptcy Date”), I write to request your court’s recognition and acceptance of Danish law regarding dissolution of attachments of Atlas’ property.
Under Chapter 4 of the Danish Bankruptcy Act, attachments of Atlas’ property cannot be made after the Bankruptcy Date, cf. Section 31(1), and any and all attachments of Atlas’ property made before the Bankruptcy Date, automatically lapses as of the Bankruptcy Date, cf. Section 31, (3).
In order to provide for the orderly and efficient administration and disposition of the Atlas estate, and in the interests of international comity, this Court asks that you recognize and effectuate the Danish Bankruptcy Act.
(ECF Doc. # 23, Sweeney Declaration Ex. A.)
The Objecting Creditors had sufficient notice of the foreign representative’s intent to rely on Danish law. 3 The Objecting Creditors did not file any objection to the Rule 44.1 notice; nor did they proffer any contrary evidence regarding Danish substantive law. Thus, the foreign representative’s evidence of foreign law is unre-butted. 4
There is little doubt that under § 304 and the Second Circuit’s decision in
Cu-nará
and its progeny, the Rule B attachments would be dissolved as a result of the Court exercising its discretion and granting comity to the Danish proceedings. Section 304 specifically permitted a court to order turnover of the foreign debtor’s property, provided that such turnover was consistent with principles of comity. 11 U.S.C. §§ 304(b)(2), 304(c);
see generally Altos Hornos,
Similarly, in
In re Milovanovic,
The foreign representative argues that Cunard supports granting comity to the Danish proceeding in this case and dissolving the Rule B attachments here. In both Cunard and in this case, the foreign courts entered orders determining that the debtors were insolvent. Neither the Swedish court in Cunard nor the Danish court in this case entered a judgment or order relating to the specific creditors’ *736 claims or the validity of the attachments obtained in the United States. The attachment in Cunará was obtained by the creditor after the foreign bankruptcy proceeding commenced. Likewise, seven of the attachments in this case were obtained after the Danish bankruptcy proceeding commenced. Section 31(1) of the Danish Bankruptcy Act clearly provides that no attachments may levy against the bankrupt’s assets after bankruptcy is announced. Both Cunará and Milovanovic stand for the proposition that attachments that would be void under foreign law should not be accorded special status just because the foreign representative initiated an ancillary proceeding here. Both cases also stand for the proposition that in such circumstances, the attachments would be dissolved and the funds returned to the foreign forum without prejudice to any of the creditors raising arguments in the foreign proceedings. Therefore, unless the adoption of chapter 15 altered the principles of comity recognized in Cunará and Milovanovic, the Court would grant comity to the Danish proceedings and dissolve the seven attachments filed after the Danish bankruptcy was announced.
With respect to the two pre-Danish-bankruptcy attachments, while Danish law is less clear, the unrebutted evidence also supports dissolving these attachments. Section 31(3) of the Danish Bankruptcy Act provides that at the time of the bankruptcy all attachments lapse. While the Court questions whether the scope of § 31 of the Danish statute is as broad as the foreign representative makes it out to be, the fact that the two attachments were filed only weeks before the Danish bankruptcy commenced suggests that they would fall within the ambit of the statute. Furthermore, the letter from the presiding judge likewise supports the conclusion that any attachments against Atlas’ assets— whether obtained before or after the Danish bankruptcy commenced — “lapsed” by operation of law. The Objecting Creditors had an opportunity to submit evidence to rebut the foreign representative’s evidence regarding Danish law. They also could have cross-examined the foreign representative, who was present in court. They chose not to do so, and the Court is constrained to rule on the record before it. Based upon that record, application of Danish law would also result in the dissolution of the two pre-Danish-bankruptcy attachments as well. As a result, these two attachments will also be dissolved.
See Milovanovic,
Objecting Creditor Allied Maritime relies on the Second Circuit’s earlier decision in
Fotochrome, Inc. v. Copal Co.,
*737
The Second Circuit’s later decision in
Victrix,
American courts have long recognized the particular need to extend comity to foreign bankruptcy proceedings. The equitable and orderly distribution of a debtor’s property requires assembling all claims against the limited assets in a single proceeding; if all creditors could not be bound, a plan of reorganization would fail. Congress implemented this policy by enacting section 304 as part of the Bankruptcy Reform Act of 1978. This provision allows foreign bankrupts to prevent piecemeal distribution of assets in this country by filing ancillary proceedings in domestic bankruptcy courts. Under general principles of comity as well as the specific provisions of section 304, federal courts will recognize foreign bankruptcy proceedings provided the foreign laws comport with due process and fairly treat claims of local creditors.
Victrix,
In words that equally apply to Allied Maritime’s arguments, Judge Newman also wrote:
However, different concerns bear on a case such as this one, which takes on a public character by virtue of Salen’s insolvency and the institution of the Swedish bankruptcy proceeding. Any distribution of Salen’s limited assets is likely to affect other creditors, not parties to the proceeding, who obeyed the Swedish court’s stay and sought relief only in the bankruptcy proceeding. By attaching Salen’s local assets after its declaration of bankruptcy, Victrix attempted to secure a “captive fund” to satisfy the anticipated arbitration award. We will not aid Victrix’s effort to evade the writ of the Swedish bankruptcy court.
Deference to the Swedish bankruptcy court is appropriate so long as the attached funds are subjected to the jurisdiction of that court. Salen makes no claim that the funds should be transferred to it. On the contrary, it requests that the funds be transferred to the liquidator to abide the orders of the bankruptcy court. It will then be up to the Swedish court to determine what benefit, if any, Victrix should enjoy from having obtained the London arbitration award and the British judgment and having asserted its claim against the attached funds.
Id. at 714-15 (citation omitted).
While Victrix dealt with an attachment obtained after the foreign bankruptcy proceeding commenced — as is true for the attachment that Allied Maritime obtained here — the court’s reasoning applies to the two creditors who obtained their Rule B attachments only a short time before the Danish bankruptcy proceeding commenced. Only one of those creditors— Dormin Shipping — has objected to the relief sought by the foreign representative. Dormin is free to argue to the Danish bankruptcy court that Dormin has a superior claim to the amount it successfully garnished before the Danish bankruptcy commenced.
Finally, the Objecting Creditors also assert that even if the Court grants comity to the Danish proceeding, the Rule B attachments should remain in force because comity is not one of the listed grounds for vacating a Rule B attachment under the Second Circuit’s decision in
Aqua Stoli,
C. Chapter 15 Relief Available Upon Recognition of a Foreign Main Proceeding
1. Chapter 15 Embodies Principles of Comity
As noted above, chapter 15 replaced § 304 as the Code’s operative provisions for dealing with cross-border insolvencies. Nevertheless, many of the principles underlying § 304 remain in effect under chapter 15. Significantly, chapter 15 specifically contemplates that the court should be guided by principles of comity and cooperation with foreign courts in deciding whether to grant the foreign representative additional post-recognition relief. This is evidenced by the pervasiveness with which comity appears in chapter 15’s provisions. For example, § 1509 specifically requires that if the court grants recognition under § 1517, it “shall grant comity or cooperation to the foreign representative.” 11 U.S.C. § 1509(b)(3). In addition, § 1507 also explicitly directs the court to consider comity in granting additional assistance to the trustee.
While recognition of the foreign proceeding turns on the objective criteria under § 1517, “relief [post-recognition] is largely discretionary and turns on subjective factors that embody principles of comity.”
In re Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd.,
There is a logical reason for this. “Deference to foreign insolvency proceedings will often facilitate the distribution of the debtor’s assets in an equitable, orderly, efficient, and systematic manner, rather than in a haphazard, erratic, or piecemeal fashion.”
In re Artimm, S.r.L.,
2. Mandatory Relief Under § 1520
Section 1520 outlines the mandatory relief automatically granted upon recognition of a foreign main proceeding under chapter 15. Upon an order recognizing a proceeding as a foreign main proceeding, § 1520 makes §§ 361 and 362 applicable with respect to the debtor and property of the debtor within the jurisdiction of the United States. The statute refers to “property of the debtor” to distinguish it from the “property of the estate” that is created under § 541(a). In a chapter 15 case, there is no “estate”; nevertheless, § 1520(a) imposes an automatic stay on any action with respect to the debtor’s property located in the United States.
See In re Pro-Fit Holdings Ltd.,
Once § 1520(a) applies, §§ 363, 549 and 552 also apply to any transfer of a debtor’s interest in property within the United States. 11 U.S.C. § 1520(a)(2). Section 1520 also allows a foreign representative to operate a debtor’s business by exercising the rights and powers of a trustee under sections 363 and 552; and it applies § 552 to property of the debtor that is within the territorial jurisdiction of the United States. 11 U.S.C. § 1520(a).
3. Discretionary Relief — Statutory Bases for Ordering Turnover of Assets to the Foreign Representative
In addition to the mandatory provisions under § 1520, two other provisions in chapter 15 are implicated in this case in that they allow the Court, in its discretion, to grant further relief to the foreign representative. Section 1521(a) outlines the discretionary relief a court may order upon recognition of a foreign proceeding, whether main or non-main. 11 U.S.C. § 1521(a). The discretion that is granted is “exceedingly broad” since a court may grant “any appropriate relief’ that would further the purposes of chapter 15 and protect the debtor’s assets and the interests of creditors. Leif M. Clark, ANCILLARY & OtheR CROSS-BORDER INSOLVENCY CASES UNDER Chapter 15 of the BaneruptCY Code, § 7[2], at 70 (2008) (hereinafter, “Clark”).
The exercise of discretion is, however, circumscribed by the Bankruptcy Code. Section 1522(a) provides that the court may only grant discretionary relief under § 1521 if the interests of creditors are sufficiently protected. 11 U.S.C. § 1522(a). Section 1522(b) provides that the court may impose conditions on discretionary relief, such as the posting of security or a bond. 11 U.S.C. § 1522(b);
see also In re Tri-Continental Exchange Ltd.,
*740 Section 1521 permits the court, in its discretion, to order the entrustment of a debtor’s assets to the foreign representative. There are two forms of discretionary entrustment a court can order under § 1521. Section 1521(a)(5) permits the court to order “entrusting the administration or realization of all or part of the debtor’s assets” in the United States to the foreign representative. 11 U.S.C. § 1521(a)(5). “Incident to the task of administering and realizing assets of the debtor within the U.S. is the need to obtain affirmative control over such assets. It may be necessary to obtain turnover of assets in the hands of third parties.” Clark, § 7[2], at 73.
In addition, under § 1521(b), the foreign representative may be entrusted with “the distribution of all or part of the debtor’s assets located in the United States.” 11 U.S.C. § 1521(b). Section 1521(b) cautions that this relief only be granted if the interests of local creditors are “sufficiently protected.” Id.
10
One court has described “sufficient protection” as embodying three basic principles: “the just treatment of all holders of claims against the bankruptcy estate, the protection of U.S. claimants against prejudice and inconvenience in the processing of claims in the [foreign] proceeding, and the distribution of proceeds of the [foreign] estate substantially in accordance with the order prescribed by U.S. law.”
In re Artimm,
In addition to § 1521’s provisions regarding “any appropriate relief,” § 1507(b) provides that a court, “[i]n determining whether to provide additional assistance ... shall consider whether such additional assistance, consistent with the principles of comity, will reasonably assure—
(1) just treatment of all holders of claims against or interests in the debt- or’s property;
(2) protection of claim holders in the United States against prejudice and inconvenience in the processing of claims in such foreign proceeding;
(3) prevention of preferential or fraudulent dispositions of property of the debt- or;
(4) distribution of proceeds of the debt- or’s property substantially in accordance with the order prescribed by this title; and
(5) if appropriate, the provision of an opportunity for a fresh start for the individual that such foreign proceeding concerns.”
11 U.S.C. § 1507(b) (emphasis added). These provisions embody the protections previously contained in § 304 with one critical exception: the principle of comity was removed as one of the factors and elevated to the introductory paragraph. The legislative history confirms that the principle of comity was placed in the introductory language to § 1507 to emphasize its importance.
See United States v. J.A. Jones Constr. Group, LLC,
The interplay between the relief available under §§ 1507 and 1521 is far from clear. Nevertheless, the legislative history confirms that Congress expected courts to interpret the provisions consistently with prior law under § 304. Indeed, while “[i]t is clear that Congress did not intend merely to continue § 304 unchanged[,] ... the legislative history of § 1521 states that the section does not expand ‘the scope of relief currently available under § 304.” Gropper, at 4 (citing H.R.Rep. No. 109-031, at 116 (2005)). As Judge Gropper notes, the language in § 1507 permitting the court to grant “additional assistance ” to the trustee is different from the language in § 1521 allowing the court to fashion “any appropriate relief' to fit the circumstances of the case. 11 Gropper, at 2-3. Whatever the outer bounds of discretionary relief chapter 15 allows, this case does not push the boundaries. The relief sought by the foreign representative is expressly provided for in §§ 1521(a)(5) and 1521(b). The Court need not venture into the area of “additional assistance,” “consistent with principles of comity” under § 1507.
As noted above, before the Court can order turnover of the funds to the foreign representative for administration in the foreign bankruptcy proceeding under § 1521(b), the Court must conclude that domestic creditors are sufficiently protected. In this case, there are no U.S. claimants; each of the creditors that obtained a Rule B attachment is a foreign creditor. Their claims have no connection to the United States, other than their success in garnishing Atlas’ funds in banks in New York through Supplemental Rule B attachments in support of the creditors’ London arbitrations against Atlas. “[T]he traditional policy underlying maritime attachment has been to permit the attachments of assets wherever they can be found and not to require the plaintiff to scour the globe to find a proper forum for suit or property of the defendant to satisfy a judgment.”
Aqua Stoli,
With respect to whether the funds should turned over to the foreign representative,
Tri-Continental,
Here, the foreign representative seeks both forms of turnover relief under § 1521. The Court concludes that § 1521(a)(5) and § 1521(b) provide sufficient grounds to award such relief. In this case, if the garnished funds are released to the foreign representative, she proposes to remove the funds from the United States. She can be permitted to do so under § 1521(b), with the creditors protected by making those funds subject to administration by the bankruptcy court in Denmark. The foreign representative acknowledged during the March 25, 2009 hearing that if the relief is granted, it is without prejudice to creditors’ rights, if any, to assert in the Danish bankruptcy court their rights to the previously garnished funds. This is sufficient protection to the creditors here.
See In re Milovanovic,
4. Discretionary Relief — Limits on Avoidance Actions
The inquiry does not necessarily end there. The Objecting Creditors argue that the Court’s discretion to grant comity to the Danish proceeding is limited by language in § 1521 that prohibits the foreign representative from initiating avoidance actions in a chapter 15 case. The Court finds the argument unpersuasive. First, the foreign representative here has not initiated avoidance actions, so that language is not implicated in this case. Second, the Court grounds its ruling in § 1521(a)(5) and § 1521(b), which expressly provide for the relief granted here with no such limitation.
Section 1521(a)(7) carves out avoidance powers under §§ 544, 547 and 548, which are only available to the trustee in a full
*743
case under another chapter.
13
See
Clark, § 7[2], at 73; 8 Collier’s on BankRuptcy ¶ 1521.02 (15th rev. ed.2009). Section 1523(a) grants the foreign representative the powers of a trustee to bring avoidance actions only in full bankruptcy cases under another chapter of the Code. 11 U.S.C. § 1523(a). The only court that appears to have addressed in a published opinion the scope of the avoidance action carve-out is the district court in
Fogerty v. Condor Guaranty, Inc. (In re Condor Ins. Ltd (In Official Liquidation)),
slip copy,
In
dicta^
the court also noted that the foreign representative could seek avoidance in the foreign jurisdiction and then seek recognition of the foreign order here.
Id.
at *3 n. 6 (citing
In re Ephedra Prods. Liab. Litig.,
*744
While the parties relied extensively on
Condor
in briefing, the Court concludes that its reasoning is open to question and it is in any event inapplicable to this case since the foreign representative has not commenced an avoidance action under U.S. or foreign law. The
Condor
court’s conclusion that Congress intended to prevent a foreign representative from bringing avoidance actions based on foreign law is not supported by anything specifically in the legislative history. The court also ignores cases decided under § 304.
See, e.g., In re Metzeler,
More important for this case,
Condor
did not deal with issues concerning comity to a foreign bankruptcy proceeding. Indeed, as noted above, in a footnote, the court suggested that it would recognize under principles of comity a foreign avoidance order.
*745 Notwithstanding the different procedural posture of this case, the Objecting Creditors argue that the carve-out for avoidance actions in §§ 1521(a)(7) and 1523 prevents Atlas’ foreign representative from obtaining the relief she seeks, contending that the only way to dissolve the Rule B attachments is through a § 547 preference avoidance action in a case under chapters 7 or 11. This argument fails, however, because it hinges on equating vacating the Rule B attachments (and requiring the parties to litigate their rights in Denmark) with avoiding a transfer of debtor’s property under § 547. The creditors cite no authority that the only way to dissolve a Rule B attachment is through an avoidance action. Specifically, they fail to show why the requested relief — entrusting the previously garnished funds to the foreign representative for administration by the Danish bankruptcy court — cannot be ordered under §§ 1521(a)(5) and 1521(b). The Objecting Creditors’ rights, if any, are not being avoided; rather, whether they have superior claims to the previously garnished funds will be for the Danish court to decide. The Objecting Creditors’ argument is also belied by their motives: it appears that their strategy is to try to avoid the reach of both this Court and the Danish court to further enhance their leverage in negotiations with Atlas or to provide an avenue to recover their claims in full. 17 Either way, even if the Court were to countenance such blatant gamesmanship — and the Court declines to decide issues of U.K. or Danish law — this strategy is probably fatally flawed. 18
*746 Ordering entrustment of the previously garnished funds to the foreign representative does not fall within the ambit of the avoidance action carve-out in §§ 1521(a)(7) and 1523, because, as discussed above, it is properly considered turnover relief under §§ 1521(a)(5) and 1521(b). A judgment in an avoidance action results in an order that the creditor may not retain an interest in debtor’s property. See 11 U.S.C. § 551 (avoided transfers are retained for the benefit of the estate); 5 CollieR’s on Bankruptcy ¶ 551.02[2], at 551-6 (15th rev. ed.2009). The Court does not make such a determination here.
D. Section 513 Does Not Apply in Chapter 15 Cases
Lastly, in addition to the relief provisions under chapter 15, the foreign representative also argues that § 543’s turnover provisions apply here and require the custodian banks to turnover restrained funds to the trustee. Section 101(ll)’s definition of custodian includes anyone authorized by contract or law to take charge of the debtor’s property for the purpose of enforcing a lien. 11 U.S.C. § 101(11)(C); 5 COLLIER’S ON BANKRUPTCY ¶ 543.01[1] (15th rev. ed 2009). That definition encompasses a garnishee bank that has restrained the debtor’s funds.
See Barr v. Juniata Valley Bank (In re DeLancey),
But Chapter 15 is silent as to whether § 543’s mandatory turnover requirements apply in the chapter 15 context, and the discretionary nature of § 1521’s turnover provisions suggests that the mandatory obligations of § 543 should not apply in the chapter 15 context. Otherwise, there would be a conflict between the discretionary turnover provisions under § 1521, on the one hand, and the mandatory turnover requirement in § 543, on the other hand. The Court adopts the view that § 1521 overrides the mandatory obligations under § 543, because if § 543 applied, § 1521 would appear to have no purpose. 19
CONCLUSION
For the reasons explained above, the Court grants the foreign representative the following additional relief:
1. The Supplemental Rule B attachments obtained by the following creditors in the United States District Court for the Southern District of New York are hereby vacated: Dormin Shipping, Limankoy, Amanda Navigation, Sertio Shipping, Allied Maritime, New Era Shipping, *747 Cargill International, Peninsula Petroleum, Malena Shipping.
2. Atlas’s foreign representative shall take possession of the funds that were subject to the Supplemental Rule B attachments (which funds are currently held in escrow by the foreign representative’s U.S. counsel); provided, however, that such funds are hereby subjected to the jurisdiction and administration of the Danish bankruptcy court in the pending Atlas proceedings.
3. “It will then be up to the [Danish] court to determine what benefit, if any, [these creditors] should enjoy from having obtained” the Rule B attachments. Victrix,825 F.2d at 715 .
IT IS SO ORDERED.
Notes
. There is some dispute over the date of the first attachment. One set of papers lists the date as October 31, 2008, while another lists it as November 3, 2008. The difference is not material to the outcome of this Opinion.
. Since the Supplemental Rule B maritime attachments were obtained by Atlas' creditors between November 3, 2008, and December 29, 2008, it is unlikely that the foreign representative could set them aside as avoidable preferences under § 547 in a case under chapters 7 or 11 because the 90-day avoidance period has lapsed; all of these attachments could have been avoided if a case under chapters 7 or 11 had been filed when the chapter 15 petitions were filed.
. In addition to the Notice of Intent filed on ECF on February 24, 2009, counsel for the foreign representative stated such intent at a hearing on February 20, 2009.
. The Objecting Creditors argue that § 31 of the Danish Bankruptcy Act should not be given extraterritorial effect. They did not offer evidence on this issue of Danish law. Indeed, other countries' foreign laws are often given extraterritorial effect by U.S. courts.
See Adinolfi v. Empire Marble & Granite, Inc. (In re Rosacometta, S.r.L),
.In
Koreag,
the Second Circuit held that while ordinarily a court will order turnover to a foreign representative in deference to the foreign proceeding, if there is a bona fide dispute regarding the title of the assets to be turned over, the court must first make a threshold determination regarding ownership.
. Both
Victrix
and
Cunard
involved the same foreign debtors — Salen Reefer Services, A.B. and Salen Dry Cargo A.B. — and the same Swedish bankruptcy proceeding.
See Victrix,
. The debtor in Milovanovic filed its petition in 2003, before chapter 15 was adopted.
.As is the case here, the court also specifically held that all of Nugent’s rights in the foreign proceeding were reserved and its ruling was without prejudice to any arguments it wanted to make as part of the foreign proceedings.
. The foreign representative also cites to
Wajilam Exports (Singapore) Pte. Ltd. v. ATL Shipping,
. The Code uses the term “sufficiently protected” to distinguish § 1521(b) from "adequate protection” under § 361.
. This distinction also resolves the Objecting Creditors' argument that Congress limited the Court’s discretion to grant comity to foreign proceedings. Section 1507(a) provides that the Court may grant additional relief to the foreign representative consistent with principles of comity,
"[sjubject to the specific limitations stated elsewhere in this chapter
...." 11 U.S.C. § 1507(a) (emphasis added). The Objecting Creditors argue that this language specifically refers to the avoidance action carve-outs in §§ 1521(a)(7) and 1523(a), and thus Congress has explicitly limited the Court's discretion to grant the requested relief through comity to a foreign proceeding.
See Maxwell Commc’n Corp. v. Societe Generate (In re Maxwell Commc’n Corp.), 93
F.3d 1036, 1047 (2d Cir.1996) ("Because the principle of comity does not limit the legislature’s power and is, in the final analysis, simply a rule of construction, it has no application where Congress has indicated otherwise.”) (citing
Romero v. Int’l Terminal Operating Co.,
. The foreign representative in Tri-Continen-tal did not seek § 1521(b) relief.
. Section 1521(a)(7) provides that the court may grant any additional relief that may be available to a trustee, "except for relief available under sections 522, 544, 545, 547, 548, 550 and 724(a).” Therefore, to gain these avoidance powers, the foreign representative must commence a case under chapters 7 or 11.
. In addition, Congress also expected courts to look at § 304 case-law in interpreting chapter 15.
. See also 2 Collier on Bankruptcy ¶ 304.06, at 304-25 (15th rev. ed.2009) (footnotes omitted):
Despite the suggestion of some early cases to the contrary, it is clear that section 304(b)(2) does not vest the foreign representative with the authority to commence avoidance actions under the powers granted a bankruptcy trustee in a plenary case commenced under the Bankruptcy Code. Thus, a foreign representative may not, in a case under section 304, assert claims for the turnover of money or property of the debtor under sections 542, 543, 544, 545, 547, 548, 549, 550 and 553 of the Bankruptcy Code.
On the other hand, section 304(b)(2) permits a bankruptcy court to act as a forum for the assertion in the United States of avoiding powers and similar causes of action that are vested in the foreign representative under otherwise applicable law. Thus, a foreign representative may assert in a section 304 case claims for the turnover of property or assets that arise under the law of the foreign jurisdiction whence the foreign representative comes. But before a foreign representative will be allowed to maintain such a cause of action, the bankruptcy court will be required to determine whether to grant the relief after having weighed the factors prescribed by section 304(c).
. Neither Metzeler nor Condor address whether a fraudulent conveyance claim applying foreign law would need to be brought under § 544(b)(1), where the foreign law would be the "applicable law” under that section. The Court's research failed to locate any authority addressing whether "applicable law” includes foreign law. Sections 1521(a)(7) and 1523(a) specifically exclude a chapter 15 foreign representative’s avoidance power under § 544 unless a case under chapters 7 or 11 is commenced. Section 544(b) gives the trustee the standing of a judgment lien creditor; a preference action under foreign law would not appear to depend on status as a judgment lien creditor and, therefore, § 544(b) would appear inapplicable to such claims. A preference action under foreign law might be available as "additional assistance” under § 1507.
. The Objecting Creditors' strategy became clear during the March 25, 2009 argument. First, they argue that this Court cannot vacate the Rule B attachments absent an adversary proceeding brought in a case under chapters 7 or 11, claims that could no longer be timely brought within the 90-day preference period. Second, the Objecting Creditors contend that the Danish bankruptcy court does not have personal jurisdiction over them and, thus, any stay issued by the Danish court cannot prevent them from proceeding with their London arbitrations, which they plan to do. Third, they argue that the automatic stay applicable in this chapter 15 case extends only to debtors' property in the U.S. and not to the London arbitrations. Fourth, if they are successful in obtaining arbitration awards in London, the creditors will obtain English judgments on the arbitration awards. And finally, fifth, the creditors will then return to the district court in New York seeking recognition and enforcement of the English judgments against the assets that have been garnished under the Rule B attachments. In this fashion, they hope to circumvent the jurisdiction of the Danish bankruptcy court and this Court, and to recover the entire amount of their claims while other Atlas creditors who file claims in the Danish bankruptcy proceeding may recover substantially less.
. The Court has doubts about the efficacy of each step of the Objecting Creditors’ strategy. The argument that the Danish court has no personal jurisdiction is questionable, but it is one for the Danish or U.K. courts to decide.
See Ecoban Fin. Ltd. v. Grupo Acerero Del Norte, SA. de C.V.,
. In addition, the foreign representative also argues that the bankruptcy court’s decision in
In re Syrria Adomah,