In the September 2022 edition of Bankruptcy Litigation, an ABI Committee Newsletter, Togut Firm partner Kyle J. Ortiz, counsel Bryan M. Kotliar, and associate Jared C. Borriello published an article on the SDNY Bankruptcy Court’s recent decision in In re JPA No. 111, Co., Ltd. & JPA No. 49 Co., Ltd., which ruled on the eligibility of foreign debtors to file for chapter 11 protection in the United States and related jurisdictional issues. The ruling provides key guidance for foreign debtors preparing to file for chapter 11 protection.
On February 1, 2022, Hon. David S. Jones of the SDNY Bankruptcy Court denied a motion to dismiss the debtors’ chapter 11 cases filed by the debtors’ majority secured lender, finding that the debtors’ interest in retainer funds held by the debtors’ chapter 11 counsel, with nothing more, established sufficient ties to the U.S. for purposes of eligibility under section 109 of the Bankruptcy Code. Judge Jones also rejected a challenge to the bankruptcy cases as having been filed in bad faith, finding that the debtors’ proposed section 363 sale and auction process would maximize value for all stakeholders as compared to the prepetition enforcement and foreclosure sale attempted by the debtors’ security agent and senior secured lender. The article can be accessed here.
The Togut Firm served as counsel to the JPA debtors in their chapter 11 cases, which were filed in December 2021. As described in prior press releases, the Togut Firm advised the debtors in successfully consummating a section 363 sale of substantially all of their assets after securing a following a global settlement of hotly contested litigation over the proposed sale and other issues, and in confirming a chapter 11 plan of liquidation that unimpaired all claims and allowed the debtors’ equity holder to retain its interests.