Nat'l Bank of Anguilla (Private Banking Trust) Ltd. v. Nat'l Bank of Anguilla (In re Nat'l Bank of Anguilla (Private Banking Trust) Ltd.), Case No. 16–11806 (MG)

• Decision Date: 29 January 2018
• Docket Number: Adv. Pro. Case No. 17–01058 (SMB),Case No. 16–13311 (SMB),Adv. Pro. Case No. 16–01279 (MG),Case No. 16–11806 (MG)
• Parties: IN RE: NATIONAL BANK OF ANGUILLA (PRIVATE BANKING TRUST) LTD., Debtor. National Bank of Anguilla (Private Banking Trust) Ltd., Plaintiff, v. National Bank of Anguilla, National Commercial Bank of Anguilla and Eastern Caribbean Central Bank, Defendants. In re: Caribbean Commercial Investment Bank Ltd., Debtor. Caribbean Commercial Investment Bank Ltd., Plaintiff, v. Caribbean Commercial Bank (Anguilla) Ltd., National Commercial Bank of Anguilla Ltd., and Eastern Caribbean Central Bank, Defendants.
• Court: United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York

580 B.R. 64

IN RE: NATIONAL BANK OF ANGUILLA (PRIVATE BANKING TRUST) LTD., Debtor.

National Bank of Anguilla (Private Banking Trust) Ltd., Plaintiff,

v.National Bank of Anguilla, National Commercial Bank of Anguilla and Eastern Caribbean Central Bank, Defendants.

In re: Caribbean Commercial Investment Bank Ltd., Debtor.

Caribbean Commercial Investment Bank Ltd., Plaintiff,

v.Caribbean Commercial Bank (Anguilla) Ltd., National Commercial Bank of Anguilla Ltd., and Eastern Caribbean Central Bank, Defendants.

Case No. 16–11806 (MG)

Adv. Pro. Case No. 16–01279 (MG)

Case No. 16–13311 (SMB)

Adv. Pro. Case No. 17–01058 (SMB)

United States Bankruptcy Court, S.D. New York.

Signed January 29, 2018

REED SMITH LLP, Attorneys for the Plaintiffs and Debtors and Debtors in Possession National Bank of Anguilla (Private Banking & Trust) Ltd. And Caribbean Commercial Investment Bank Ltd., 599 Lexington Avenue, New York, NY 10022–7650, By: James C. McCarroll, Esq. Jordan W. Siev, Esq., Kurt F. Gwynne, Esq. (pro hac vice )

VINSON & ELKINS LLP, Attorneys for Defendant Eastern Caribbean Central Bank, 2001 Ross Avenue, Suite 3700, Dallas, TX 75201–2975, By: John C. Wander, Esq. (pro hac vice ), Rebecca Lynn Petereit, Esq. (pro hac vice ), and, 2801 Via Fortuna, Suite 100, Austin, Texas 78746–7568, By: Marisa Secco, Esq. (pro hac vice ), and, 666 Fifth Avenue, 26th Floor, New York, NY 10103–0040, By: Jessica C. Peet, Esq.

BROWN RUDNICK LLP, Attorneys for Defendant National Commercial Bank of Anguilla, Ltd., Seven Times Square, New York, NY 10036, By: David J. Molton, Esq., Daniel J. Saval, Esq., Gerard T. Cicero, Esq.

ALLEN & OVERY LLP, Attorneys for Defendant National Bank of Anguilla Ltd. (in receivership) and Defendant Caribbean Commercial Bank (Anguilla) Ltd. (in receivership), 1221 Avenue of the Americas, New York, NY 10020, By: Laura R. Hall, Esq., Justin L. Ormand, Esq., Rebecca R. Delfiner, Esq.

MEMORANDUM OPINION AND ORDER GRANTING MOTIONS TO STAY THESE ADVERSARY PROCEEDINGS BASED ON FORUM NON CONVENIENS AND INTERNATIONAL COMITY

STUART M. BERNSTEIN and MARTIN GLENN, UNITED STATES BANKRUPTCY JUDGES

I. INTRODUCTION ¹

This joint opinion addresses common issues raised by the Motions to Dismiss in two separate Adversary Proceedings—one pending before Judge Bernstein and the other pending before Judge Glenn. The two Adversary Proceedings were filed in connection with two separate chapter 11 cases, one for each of two Anguilla "offshore banks" (as explained below). The two Anguilla offshore banks failed between 2013 and 2016, and each Debtor Bank is the subject of a receivership proceeding and litigations pending in the Anguilla courts. The same Foreign Representative in two separate chapter 15 cases (one for each Anguilla offshore bank) filed these chapter 11 cases after recognition of Anguilla receivership proceedings as foreign main proceedings.

The two chapter 11 cases were filed to enable the Foreign Representative to bring avoidance claims under federal and New York law, as 11 U.S.C. § 1521(a)(7) does not permit federal and state law avoidance claims to be brought in a chapter 15 case, and, as freely admitted by the Debtor Banks, Anguilla law does not recognize constructive fraudulent transfer claims. The Defendants in these Adversary Proceedings, for the most part, are the same, counsel to the Plaintiffs and the Defendants are the same, and the briefs and arguments relating to the Defendants' Motions to Dismiss the two Adversary Proceedings are substantially the same.

Because of the common issues, arguments and counsel, we heard argument on the Motions to Dismiss together, and we decide the common issues together. To be clear, however, while we reach the same resolution of the Motions, this joint Opinion reflects the separate opinion of each of us in our respective Adversary Proceeding.

The Motions to Dismiss raise difficult issues of personal jurisdiction, subject matter jurisdiction, forum non conveniens , international comity, Foreign Sovereign Immunities Act defenses, extraterritorial application of federal and New York law, and the act of state doctrine. We discuss the issues below, although we find it unnecessary, at this stage of these cases, to resolve all of them.

We agree that the proper disposition of each case is a stay based on forum non conveniens and international comity, pending decisions of issues raised or that can be raised, and more appropriately should be raised and decided by the courts in Anguilla.

II. BACKGROUND

A. The Pleadings and Motions

National Bank of Anguilla (Private Banking & Trust) Ltd. ("PBT") filed an adversary proceeding in this Court (the "PBT Adversary Proceeding," ECF Adv. Proc. No. 16–01279 (MG))² on December 16, 2016 (ECF PBT Doc. # 1), and filed an amended complaint (the "PBT Complaint ," ECF PBT Doc. # 32) on March 20, 2017 against the Eastern Caribbean Central Bank ("ECCB," or the "Central Bank"), the National Bank of Anguilla Ltd. ("NBA"), and the National Commercial Bank of Anguilla Ltd. ("NCBA," and together with ECCB and NBA, the "PBT Defendants"). On April 27 and 28, 2017, the PBT Defendants filed the pending motions to dismiss the PBT Complaint (the "ECCB Motion to Dismiss the PBT Complaint ," ECF PBT Doc. # 38; the "NBA Motion to Dismiss the PBT Complaint ," ECF PBT Doc. # 41; and the "NCBA Motion to Dismiss the PBT Complaint ," ECF PBT Doc. # 44, and collectively, the "PBT Motions to Dismiss "). The PBT Motions to Dismiss are supported by memoranda of law (the "ECCB (PBT) Memo ," ECF PBT Doc. # 39; the "NBA Memo ," ECF PBT Doc. # 42; and the "NCBA (PBT) Memo ," ECF PBT Doc. # 45) and the declarations of William Richard Hare (the "Hare PBT Decl. ," ECF PBT Doc. # 47)³ and Trevor Brathwaite (the "Brathwaite PBT Decl. ," ECF PBT Doc. # 40). PBT filed memoranda of law in opposition to the PBT Motions to Dismiss on May 26, 2017 (the "PBT Response to ECCB ," ECF PBT Doc. # 51; the "PBT Response to NBA ," ECF PBT Doc. # 49; and the "PBT Response to NCBA ," ECF PBT Doc. # 50, and collectively, the "PBT Opposition "). The PBT Opposition is supported by the declaration of Eustella Fontaine (the "Fontaine PBT Decl. ," ECF PBT Doc. # 52). The PBT Defendants filed reply briefs to the PBT Opposition (the "ECCB (PBT) Reply ," ECF PBT Doc. # 57; the "NBA Reply ," ECF PBT Doc. # 54; and the "NCBA (PBT) Reply ," ECF PBT Doc. # 55).

Caribbean Commercial Investment Bank Ltd. ("CCIB," and together with PBT, the "Plaintiffs," or the "Debtor Banks") filed an adversary proceeding (the "CCIB Adversary Proceeding," ECF Adv. Proc. No. 17–01058 (SMB), and together with the PBT Adversary Proceeding, the "Adversary Proceedings") by filing a complaint (the "CCIB Complaint ," ECF Doc. # 1, and together with the PBT Complaint , the "Complaints ") on May 1, 2017 against NCBA, ECCB, and the Caribbean Commercial Bank (Anguilla) Ltd ("CCB," and together with NCBA and ECCB, the "CCIB Defendants," and together with the PBT Defendants, the "Defendants," each a "Defendant"). On July 24, 2017, the CCIB Defendants filed the pending motions to dismiss the CCIB Complaint (the "CCB Motion to Dismiss the CCIB Complaint ," ECF Doc. # 12; the "ECCB Motion to Dismiss the CCIB Complaint ," ECF Doc. # 18; and the "NCBA Motion to Dismiss the CCIB Complaint ," ECF Doc. # 15, and collectively, the "CCIB Motions to Dismiss ," and together with the PBT Motions to Dismiss , the "Motions to Dismiss ," or the "Motions "). The CCIB Motions to Dismiss are supported by memoranda of law (the "CCB Memo ," ECF Doc. # 13; the "ECCB (CCIB) Memo ," ECF Doc. # 19; and the "NCBA (CCIB) Memo ," ECF Doc. # 16) and the declarations of William Richard Hare (the "Hare CCIB Decl. ," ECF Doc. # 14) and Trevor Brathwaite (the "Brathwaite CCIB Decl. ," ECF Doc. # 20). CCIB filed memoranda of law in opposition to the CCIB Motions to Dismiss (the "CCIB Response to CCB ," ECF Doc. # 24; the "CCIB Response to NCBA ," ECF Doc. # 25; and the "CCIB Response to ECCB ," ECF Doc. # 26, and collectively, the "CCIB Opposition "). The CCIB Opposition is supported by the declaration of Eustella Fontaine (the "Fontaine CCIB Decl. ," ECF Doc. # 27). The CCIB Defendants filed reply briefs to the CCIB Opposition (the "CCB Reply ," ECF Doc. # 29; the "NCBA (CCIB) Reply ," ECF Doc. # 30; and the "ECCB (CCIB) Reply ," ECF Doc. # 33).

On October 19, 2017, the Court entered an order (the "October 19, 2017 Order) in both Adversary Proceedings authorizing the parties to file additional memoranda of law addressing (1) whether the Bankruptcy Code abrogates sovereign immunity for ECCB over bankruptcy law avoidance claims under 548 and state law avoidance claims that can be asserted under section 544, and (2) whether any authority exists under Anguillan law in support of the contention that the Debtor Banks retained an interest in funds transferred from the Debtor Banks to the Defendants (ECF Doc. # 37; ECF PBT Doc. # 76). The Debtor Banks filed a joint supplemental memorandum in response to the order (the "Debtor Banks Joint Supplemental Memo ," ECF Doc. # 42, ECF PBT Doc. # 81). The Defendants also filed a joint memoranda of law (the "Defendants Joint Supplemental Memo ," ECF Doc. # 39, ECF PBT Doc. # 78), and ECCB filed another supplemental brief in response to the order (the "ECCB Supplemental Memo ," ECF Doc. # 40, ECF PBT Doc. # 79).

B. Factual Background

The facts surrounding these related Adversary Proceedings are taken primarily from the well-pleaded allegations in the Complaints .⁴ The Court assumes the veracity of well-pleaded facts when determining whether they plausibly give rise to a claim, Pension Benefit Guar. Corp. v. Morgan Stanley Inv. Mgmt. Inc. , 712 F.3d 705, 717–18 (2d Cir. 2013) (citing Ashcroft v. Iqbal , 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ), and may also consider "documents attached to the complaint as exhibits, and documents incorporated by reference in the complaint." DiFolco v. MSNBC Cable L.L.C. , 622 F.3d 104, 111 (2d Cir. 2010) (citations...