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ABC Co. has its registered office in the Cayman Islands. XYZ Co. is a wholly owned subsidiary of ABC organized under the laws of France. ABC and XYZ each has the same three directors. One is a resident of the Cayman Islands and the other two are residents of France. The senior executives of ABC and XYZ are the same. All have their primary offices in France. ABC has a mailing address in the Cayman Islands at the home of the director who resides in the Cayman Islands. Neither ABC nor XYZ has an office or other place of business in the Cayman Islands. Sam Smith is the Chief Executive Officer of both ABC and XYZ. Mr. Smith resides in France but is a United States citizen and has substantial assets in the United States. XYZ has borrowed $10.0M from Main St. Bank. ABC and Smith have guaranteed the loan. The loan and the guaranty are unsecured and both are governed by the laws of the State of New York. Main St. Bank is incorporated and headquartered in the United States. The only asset of ABC is the stock of XYZ. However, ABC has a substantial amount of debt in addition to the guaranty to the Bank. XYZ has substantial assets as well as substantial liabilities. On February 1, 2018, ABC and XYZ file liquidation proceedings in the British Virgin Islands. Joe Jones is appointed as provisional liquidator. Jones resides in and is a citizen of the BVI. Mr. Jones proposes a plan in the BVI proceedings. The plan consolidates the assets and liabilities of ABC and XYZ, provides for a pro-rata distribution of 50% to all creditors and includes a release of the Smith guaranty to Main St. Bank. Mr. Smith contributes $2,000,000 to the BVI liquidation. If ABC and XYZ were not consolidated, absent the Smith contribution, the creditors of XYZ would have gotten a 25% distribution and the creditors of ABC would not have gotten any distribution. Page 4 of 6 The Bank rejects the plan, but the plan is approved by 80% of the creditors of ABC and 80% of the creditors of XYZ. The plan is confirmed by the BVI court on September 1, 2018. On October 25, 2018, Mr. Jones (the liquidator appointed in the BVI) retains counsel located in New York City and wires a retainer from assets of XYZ to counsel on that day. On November 1, 2018, Mr. Jones files a petition under Chapter 15 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of New York seeking recognition of the BVI proceedings for both ABC and XYZ as foreign main proceedings.

QUESTION 1(A) – You represent Main St. Bank. Without regard to the terms of the BVI plan, what objections could you raise to recognition of the BVI proceedings as foreign main proceedings and how would the United States Bankruptcy Court likely rule on your objections? The Bankruptcy Court recognizes the BVI proceedings for both ABC and XYZ as foreign main proceedings. Mr. Jones, as foreign representative, seeks an order from the Bankruptcy Court enforcing the BVI plan.

QUESTION 1(B) – You represent Main St. Bank. What objections could you raise to enforcement of the BVI plan and how would the United States Bankruptcy Court likely rule on your objections? Mr. Jones files a complaint in the Chapter 15 proceeding seeking to avoid a $500,000 payment to Main St. Bank made by XYZ on December 15, 2017, under a provision of the insolvency laws of the BVI.

QUESTION 1(C) – You represent Main St. Bank. What defenses could you raise to the complaint and how would the United States Bankruptcy Court likely rule on your objections?

QUESTION #2

ABC Co. has manufacturing plants in Germany and Austria and has its corporate headquarters in France. Until January 1, 2018, ABC had its registered office in France. On January 1, 2018, ABC terminated its registration in France and moved its registered office to Austria. Main St. Bank has a mortgage on the manufacturing plant that is valid under German law. The mortgage is in default and Main St. Bank has commenced foreclosure proceedings in Germany. On February 1, 2018, ABC commenced an insolvency proceeding in Austria. In connection with that proceeding, ABC asserted that its center of main interest was in Austria and, as a result, the Austrian proceeding was a main proceeding.

QUESTION 2(A) – You represent Main St. Bank. What objections could you raise to recognition of the Austrian proceeding as a main proceeding and how would the Austrian court likely rule on your objections? On March 1, 2018, prior to a ruling by the Austrian court on the objection to the treatment of the Austrian proceeding as a main proceeding, Main St. Bank files an insolvency proceeding against ABC in France and asserts that the French proceeding is the main proceeding. On March 15, 2018, the French court rules that the French proceeding is the main proceeding. On March 30, 2018 the Austrian court rules that the Austrian proceeding is a main proceeding.

QUESTION 2(B) – Which court’s ruling controls and why? Assume the French proceeding was not filed and the Austrian proceeding is the main proceeding. Austrian insolvency law provides for a stay of all proceedings to collect debt, including on account of secured claims. ABC seeks enforcement of the stay against Main St. Bank to stop the foreclosure on the plant in Germany.

QUESTION 2(C) – You represent Main St. Bank. What objections could you raise to enforcement of the stay to stop the foreclosure on the plant in Germany and how would the Austrian court likely rule on your objections? Assume the French proceeding was not filed and the Austrian proceeding is the main proceeding. ABC has personal property assets in Germany in addition to the plant that is subject to the Main St. Bank mortgage. Assume that German insolvency law would allocate the German personal property more favorably to Main St. Bank than Austrian law.

QUESTION 2(D) – You represent Main St. Bank. What action would you recommend to your client to maximize its share of the personal property located in Germany?

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