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Anna Perry (Maples & Calder) Derbhil ORiordan (Dillon Eustace) - PowerPoint PPT Presentation

Anna Perry (Maples & Calder) Derbhil ORiordan (Dillon Eustace) Rachael Reynolds (Ogier) Rebecca Hume (Kobre & Kim) - Moderator Q1 2017 Quarterly Technical Session 8 March 2017 Recovery & Insolvency Specialists Association


  1. Anna Perry (Maples & Calder) Derbhil O’Riordan (Dillon Eustace) Rachael Reynolds (Ogier) Rebecca Hume (Kobre & Kim) - Moderator Q1 2017 – Quarterly Technical Session 8 March 2017 Recovery & Insolvency Specialists Association

  2. Agenda  Recent/Past Events  Q4 2016 Quarterly Technical Session – BREXIT  RISA / South Square conference  Christmas Luncheon Forthcoming Events  Local Events  RISA Annual Golf Day – 31 March 2017  Q2 Quarterly Technical Session - June 2017

  3. Agenda (continued) Forthcoming Events (continued) International Events  INSOL 2017 Congress, 19 to 22 March 2017, Sydney  INSOL Sao Paulo One day seminar - 25 May 2017  INSOL Tel Aviv One day seminar - 27 June 2017  INSOL Channel Islands Guernsey – 13 September 2017  INSOL ½ Day seminars PRC – 26 to 28 September 2017

  4. Agenda (continued) Attendance certificates  Available on request to john.royle@uk.gt.com Constitution  Legal & Regulatory committee working with RISA Board to re-draft RISA constitutional documents – update likely within the next quarter to members Other  RISA have negotiated a global discount for any Kimpton hotel franchise – update due to members shortly

  5. Agenda (continued) Today's presentation  RECENT INDUSTRY DEVELOPMENTS/ABI RE- VISITED  Rebecca Hume (Kobre & Kim) – Moderator  Anna Perry (Maples & Calder)  Rachael Reynolds (Ogier)  Derbhil O’Riordan (Dillon Eustace) Followed by networking at KARoo

  6. 8 March 2017

  7. Anna Perry Direct +1 345 814 5277 anna.perry@maplesandcalder.

  8. Foreign Arbitral Awards Enforcement Law (1997) Revision Matter Mandatory Arbitration Valid and stay in agreed to be clause binding favour of referred arbitration

  9. You can’t always get what you want… Rachael Reynolds

  10. Rachael Reynolds rachael.reynolds@ogier.com D: 345 815 1865 M: 345 516 2001 www.ogier.com

  11. Chapter 15 Eligibility Some recent cases on…  COMI and presence  Migration of COMI  Limits to COMI migration  Property requirement  Public Policy – Section 1506

  12. Determining Center of Main Interest  Where it began  Bear Stearns and Fairfield  Where we are now  Suntech 2014  Drawbridge Special Opportunity Fund v Barnet / Octaviar 2014  In re OAS S.A. 2015  In re Creative Finance, Ltd. 2016  In re Sovereign Assets Ltd. 2016

  13. Bear Stearns (2007) RO = COMI?  ECJ position “what matters is where head is located, not the muscles”  Rebuttable presumption under Ch 15 – place of RO is COMI  Rebut presumption “absent evidence to the contrary” (previously “absent proof to the contrary”)  “Not a strong presumption”  Petitions for Chapter 15 recognition will not be “rubber-stamped” even in the absence of any opposition  RO location not enough

  14. Fairfield Sentry (2012) - BVI When is the relevant point in time for assessing COMI?  Operational history at time of initiating foreign proceedings v time of filing  to be determined at time of filing  Liquidators moved RO, and all corporate documents  But court may look at circumstances to ensure that debtor has not manipulated its COMI

  15. Suntech (2014) COMI successfully migrated  Incorporated in Cayman, but business carried out in US and China  China was COMI prior to liquidation  Scheme agreed with bond holders and placed into PL in Cayman  Cayman JPLs:  changed principal address to Cayman  opened Cayman bank account  held board meetings in Cayman  appointment of a Cayman director  Overall JPL’s actions were all done in furtherance of legitimate goal of winding up Suntech

  16. Suntech “ to prevent an ineligible foreign debtor from establishing eligibility to support needed chapter 15 relief [would] contravene the purposes of the statute to provide legal certainty, maximize value, protect creditors and other parties’ interests and rescue financially troubled businesses ”

  17. Creative Finance (2016) - BVI Limits on eligibility– sufficient activity  Debtor incorporated in BVI, but operations in England, Spain and Dubai  Ulterior motive to migration to BVI  Liquidator performed minimal statutory functions  basic activities not undertaken (getting in bank records, ledgers, journals, receipts and expenditures)  Held: COMI not migrated  Only non-transitory economic activity in BVI – no seat for local business in BVI, so not a foreign “non-main” proceeding either

  18. Drawbridge v Barnet / Octaviar (2014) Limits on Ch. 15 eligibility - property requirement  Under s.109 of Bankruptcy Code need to show:  US residence or domicile  US place of business or  Property in the US  Claims and causes of action constitute “property”  Retainer held in trust account of US counsel also “property”  Amount / size of property does not matter  Would a peppercorn suffice?  Property requirement may be established “ without an inquiry into the circumstances surrounding the debtor’s acquisition of property ”

  19. Public Policy Section 1506  In re Petroforte 2015  In re Irish Bank Resolution Corp Ltd 2016  In re Massa Falida de Mappin Lojas de Departamento SA 2016

  20. Common law and Statutory

  21. International Cooperation Statutory and common law  Part XVII  Modified universalism  Picard v Primeo  Singularis  Ardent Harmony Fund

  22. Part XVI of Companies Law International Cooperation Purposes:  Recognising the right to act in the Islands  Staying enforcement  Examination of person in possession of information  Ordering the turnover of any property belonging to a debtor

  23. Part XVI of Companies Law International Cooperation The Court shall be guided by:  Just treatment of all creditors  Prevention of fraudulent dispositions  Distribution of debtor’s estate  Non-enforcement of foreign taxes, fines and penalties  Comity

  24. Application of statutory scheme Picard (2015)  Companies Law does not confer a general power on the Court to assist foreign representatives  Must be within scope of orders permitted by Companies Law  Making a transaction avoidance order (ie clawback) falls within Court’s power to make an order ancillary to the turning over of property belonging to a debtor  But Cayman law on transaction avoidance must be applied, even if the distribution scheme is governed by foreign law

  25. Common law assistance Singularis (2014) – PC from Bermuda  Common law supplements statutory power to assist foreign insolvency proceedings  Assistance must be consistent with local law, public policy and court’s own statutory and common law powers  Does not extend to relief which foreign representative does not have under the laws by which they were appointed  Cayman liquidators did not have the power to obtain the material sought as a matter of Cayman law, so Bermudan Court could not assist by ordering that the material be provided in Bermuda

  26. Extra Territoriality? Madison Niche, Ardent (2016)  Anti-suit injunction to prevent conflicting proceedings in Barbados  Universality of proceedings – reference to extra territorial nature of the automatic stay – cf UK position

  27. Invoking Article 50

  28. DERBHIL O’RIORDAN derbhil.oriordan@dilloneustace.ie + 1 345 814 4052 www.dilloneustace.ie

  29. A WHOLE NEW WORLD • Ireland/UK shared history • Hard borders and the border between Republic and Northern Ireland • Impact on Anglo/Irish trade

  30. WINNERS v LOSERS • Impact on the City • Free movement of trade and people • Who does the City sell to?

  31. PASSPORTING AND EU LAW • UK Managers – EU Funds • UK Management + EU distribution • UCITS v AIF s

  32. THE IRISH SOLUTION • Use the delegation model • Establish an Irish Branch or Subsidiary • Substance requirements

  33. Questions

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