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U.S. court can refuse to aid the enforcement of that law, it may not impose
U.S. law in its stead. In any event, alteration of contractual rights not only is
not anathema to U.S. bankruptcy law it is a component of such law. For
example, contracted for provisions requiring consent of the non‐debtor
party before the contract may be assumed and assigned are voided by U.S.
Bankruptcy Code section 365(f) as unlawful anti‐alienation provisions. Other
subsections of section 365 prohibit the non‐debtor party to the contract
from refusing to perform or from terminating the contract upon the
debtor’s breach thereof notwithstanding contractual provisions providing
such rights. Moreover, the alteration of value of recoveries scheme
objectors complain of regularly is affirmed under the U.S. Bankruptcy Code
even over the objection of rejecting creditors where the requisite number
and value of claims vote to approve a plan of reorganization providing for
such altered recovery.
e. UK Court Sanction of Solvent Schemes Does Not Preclude U.S. Bankruptcy
Court Consideration of Objections
POINT: UK court sanction of solvent schemes does not preclude U.S. bankruptcy court consideration of
objections.
COUNTERPOINT:
This contention has been raised and rejected by the Bankruptcy
Court for the Southern District of New York in the jointly administered
Chapter 15 cases respecting the run‐off schemes of participants in the
“WFUM pool” ~ In re Greyfriars et al, Chapter 15 Case Nos. 07‐12934‐43
(Bankr. S.D.N.Y. filed September 18, 2007). At bottom, the U.S. bankruptcy
court is not permitted to relitigate objections which have been or could have
been raised by the objectors in the non‐U.S. proceeding. See In re Bd of
Directors of Telecom Argentina, S.A., 2006 WL 3378687 (S.D.N.Y. 2006), aff’d,
528 F.3d 162 (2d Cir. 2008)(res judicata applies re recognition of foreign
proceedings). Nor is the U.S. court empowered to grant relief within the
Chapter 15 proceeding which should have been sought and could have been
granted in the non‐U.S. proceeding under the law of that jurisdiction. See In
re Condor Insurance Limited, 2008 WL 2858943 (Bankr. S.D. Miss. July 17,
2008), aff’d, 2009 WL 321627 (S.D. Miss. Feb. 9, 2009).