Approximately a year and a half ago, the district court for the Southern District of New York issued an opinion that raises important questions about the reach and applicability of the doctrine of international comity in a post-Chapter 15 world—in fact, the case appears to significantly extend the reach of comity in the context of foreign insolvency proceedings. See Oui Financing v. Dellar, 2013 WL 5568732 (S.D.N.Y. Oct. 9, 2013). Notwithstanding its significance and the passage of time, the opinion has received little attention; we believe it deserves careful consideration.
Introduction
In a nutshell, the court in Oui Financing extended comity to a French bankruptcy proceeding and dismissed a suit brought to enforce a guaranty against the non-debtor guarantor, although the foreign debtor was not initially a party to suit, the district court’s jurisdiction over the guarantor was undisputed and no Chapter 15 case was filed by the foreign debtor or the guarantor. The case raises an interesting and significant issue: May U.S. courts grant comity to foreign bankruptcy proceedings outside of the confines of Chapter 15 of the Bankruptcy Code, or stated differently, does Chapter 15 preempt comity as a basis for recognizing and enforcing foreign bankruptcy proceedings. While the court in Oui Financing dismissed the action in deference to a foreign bankruptcy proceedings based on comity alone, it never expressly analyzed the issue since it was not articulated as such by the parties.
