Expanding Jurisdiction of U.S. Bankruptcy Courts
by William H. Schrag, Wendy S. Walker and Amanda R. Waller; Morgan, Lewis & Bockius LLP; New York, N.Y.
Originally presented at the Canadian–American Bankruptcy Symposium
Two recent appellate decisions of the U.S. District Court for the Southern District of New York (the “district court”) have the potential for altering the jurisdictional landscape of bankruptcy courts in the United States. In In re Globo Comunicacoes e Participacoes S.A., 317 B.R. 235 (S.D.N.Y. 2004) (“Globopar”), the district court (Marrero, J.) established a road map for domestic creditors to commence an involuntary proceeding against a foreign debtor under Bankruptcy Code §303(b)(1), thereby opening potential avenues of recovery for domestic creditors who are unable to recover in a foreign jurisdiction. In In re Agency for Deposit Insurance Rehabilitation, Bankruptcy and Liquidation of Banks v. Superintendent of Banks of the State of New York, 310 B.R. 793 (S.D.N.Y. 2004), appeal docketed, No. 04-4997-bk (2d Cir. Oct. 18, 2004) (the “Yugoslavian Liquidators” case), under the rationale of providing a “helping hand” in aid of foreign proceedings, the district court (Rakoff, J.) held that the eligibility restrictions of Bankruptcy Code §109 are inapplicable to foreign banks commencing ancillary proceedings and, in the process, shut out a domestic creditor who had been unable to recover in the foreign proceeding.
Blue Tinting: Commodity Supply Contracts in Androscoggin Energy LLC
by Robin Schwill and Rupert Chartrand; Osler, Hoskin & Harcourt LLP; Toronto
Can a court ordered stay of proceedings under the Canadian restructuring statute, the Companies’ Creditors Arrangement Act (the “CCAA”) apply to a contract for the supply of natural gas? This depends in part on whether the contracts fall within the definition of “eligible financial contracts” under the CCAA, and, in part, on the terms of the contracts.
What constitutes an eligible financial contract for the purposes of §11.1 of the CCAA was recently reconsidered in insolvency proceedings in respect of Androscoggin Energy LLC.
Agenda for the 2005 Annual Spring Meeting
The Committee will present a panel—“Selling Foreign Assets Free and Clear under Section 363.”—at the 2005 Annual Spring Meeting on Saturday, April 30, 2005 at 8:00 a.m.