Bear Stearns' Hedge Funds' Chapter 15 application rejected on COMI grounds
In a judgement here, published on 30 August 2007, Judge Burton Lifland in the US Bankruptcy Court (Southern District of New York) declined to recognise the Cayman Islands provisional liquidations of two Bear Stearns' Hedge Funds as foreign main proceedings.
Although registered in the Cayman Islands, the two companies' Centres of Main Interest were in the USA so the provisional liquidations could not be main proceedings.
Neither could they be foreign non-main proceedings as neither company had an establishment in the Cayman Islands.
The decision specifically uses the UNCITRAL Model Law and the European Insolvency Regulation to interpret the provisions of Chapter 15 of the US Bankruptcy Code. It also disagrees with parts of the Sphinx decision. Eurofood is cited.
Jordan E. Bublick describes the decision here at International Insolvency Law Blog.
You will want to read Bob Eisenbach's comprehensive post on the subject here on his Business Bankruptcy Blog, "In The (Red)".
A slightly amended Written Opinion/Decision and Order was published here on 5 September.
Professor Bob Wessels describes the decision on his blog here.
For a commentary on the recent Chapter 15 cases (including the Bear Stearns cases), see L. C. Ho, 'Proving COMI: Seeking Recognition Under Chapter 15 of the US Bankruptcy Code' available at http://ssrn.com/abstract=1014452