By Amy Caton, Thomas Moers Mayer, Adam C. Rogoff, Megan M. Wasson, and Ashland J. Bernard (Kramer Levin)
In contrast with traditional commercial litigation, Chapter 15 proceedings can provide quick and effective solutions for managing issues that arise in connection with foreign insolvency proceedings, and for obtaining judicial relief in the United States. Chapter 15 of the Bankruptcy Code is designed to facilitate cross-border insolvency proceedings and provides a statutory framework for obtaining recognition of those proceedings within the U.S.
Wayne Burt Pte. Limited, a Singaporean corporation, defaulted on $16 million in U.S. dollar-denominated loans purportedly secured by shares in an Indian subsidiary. Certain of its American creditors took possession of the certificates of stock and refused to return them. Wayne Burt then initiated insolvency proceedings in Singapore, and the Singapore court entered an order to wind-up Wayne Burt, appointed a liquidator, and ordered the American creditors to turn over the disputed shares. The liquidator spent nearly four years in U.S. District Court and appellate proceedings trying to enforce that order and regain possession of the shares. In 2024, after years of being mired in litigation, the liquidator retained new counsel with a new strategy and commenced a Chapter 15 case on behalf of Wayne Burt in the U.S. Bankruptcy Court for the District of New Jersey, seeking recognition of the Singapore liquidation proceeding and recognition of the Singapore court’s turnover order. Less than two months later, on November 7, the U.S. Bankruptcy Court recognized the Singaporean proceedings and swiftly issued an order granting the turnover relief.
Through the Chapter 15 filing, the liquidator was able to obtain in weeks what commercial litigation could not achieve in nearly four years, underscoring how Chapter 15, when used correctly – and in aid of a recognized foreign insolvency regime such as Singapore’s insolvency process – remains an effective vehicle for obtaining relief in connection with cross-border insolvency proceedings.
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