# In re Oi Brasil Holdings Coöperatief U.A.

> United States Bankruptcy Court, S.D. New York · December 4, 2017 · 578 B.R. 169

URL: https://www.frixlaw.com/law-library/cases/8501138

## Case

- **Full name:** IN RE: OI BRASIL HOLDINGS COÖPERATIEF U.A., Debtor in a Foreign Proceeding. In re: Oi Brasil Holdings Coöperatief U.A., Debtor in a Foreign Proceeding. In re: Oi S.A., Debtors in a Foreign Proceeding
- **Court:** United States Bankruptcy Court, S.D. New York
- **Decided:** December 4, 2017
- **Citations:** 578 B.R. 169
- **Precedential status:** Published
- **Opinion:** Opinion of the court by Lane
- **Judges:** Lane
- **Cited by:** 41 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/8501138

## How later opinions describe it (automated extraction)

- explaining that no issues of deference or comity arise in countries that have not adopted the Model Law, including Brazil
- stating that "the burden rests on the foreign representative to prove each of the requirements of Section 1517"

## Opinion text

POST-TRIAL MEMORANDUM OF DECISION
SEAN H. LANE, UNITED STATES BANKRUPTCY JUDGE Before the Court is the Verified Petition and Motion seeking an Order (I) Recognizing the Dutch Bankruptcy Proceeding as the Foreign Main Proceeding for Oi Brasil Holdings Cooperatief U.A. (“Coop” or the “Debtor”); (II) Recognizing the Insolvency Trustee as the Foreign Representative; (III) Modifying the Prior Recognition Order; (IV) Modifying the Prior Joint Administration Order and (V) Granting Certain Related Relief, dated July 7, 2017 (as later supplemented and modified, the “Dutch Petition”) [ECF Nos. 2, 23], 1 The Dutch Petition was filed by Jasper R. Berkenbosch, solely in his capacity as Insolvency Trustee of Debtor Coop (the “Insolvency Trustee”).
The Dutch Petition presents the Court with a complex factual and procedural history. Coop is a Dutch entity that is part of a family of Brazilian telecommunications companies (the “Oi Group”) that initiated bankruptcy proceedings in Brazil in the summer of 2016. In July 2016, several of these Oi Group entities—including Coop— sought and received recognition in this Court of the Brazilian bankruptcy proceedings as a foreign main proceeding under Chapter 15 of the United States Bankruptcy Code. As a basis for that recognition, the Court found Coop’s center of main interests (“COMI”) to be in Brazil given Coop’s status as a special purpose financing vehicle for the Oi Group.
Around the same time, a number of Coop’s creditors began to take action against Coop in the Netherlands, which culminated in a Dutch bankruptcy proceeding for Coop. After months of litigation in the Dutch court system, the highest national court in the Netherlands upheld the jurisdiction and propriety of Coop’s bankruptcy proceedings under Dutch law. In July 2017, the Insolvency Trustee appointed in the Netherlands filed the Dutch Petition now before this Court. Contending that Coop’s COMI is in the Netherlands, the Dutch Petition seeks to have the Court recognize Coop’s Dutch bankruptcy proceedings as a foreign main proceeding under Chapter 15 and also to overturn the prior recognition by this Court of Coop’s Brazilian bankruptcy proceedings. The Insolvency Trustee’s Dutch Petition is supported by Aurelius Capital Management, LP (“Aurelius”) and other like-minded creditors who make up the International Bondholder Committee (the “IBC,” and together with the Insolvency Trustee, the “Movants”). The relief requested by the Movants is opposed by the debtors that previously Received recognition of the Brazilian bankruptcy proceedings in this Court. These debtors are joined by a separate group of Oi Group creditors (the “Steering Committee,” and, together with the debtors in the prior case, the “Objectors”).
To address the numerous issues presented by the parties, this Decision is divided into sections. The first section sets forth a detailed statement of facts based on the evidence presented in the case, including at trial. The remaining sections are the Court’s conclusions of law based on these facts and applicable law. They open with a brief primer on Chapter 15 of the Bankruptcy Code, focusing on recognition and the crucial concept of a debtor’s COMI. The Court next turns to the parties’ competing views of the applicable legal standard for evaluating the Dutch Petition and Coop’s COMI. On the one hand, the Movants urge the Court to conduct a de novo review of Coop’s COMI under Section 1517(a) as of the date the Dutch Petition was filed. On the other hand, the Objectors advocate reviewing this case under Section 1517(d), which looks at whether a prior COMI determination should be terminated or modified because it was incorrect in the first instance or based on events after recognition. For the reasons explained below, the Court finds that Section 1517(d) provides the appropriate standard.
After addressing the applicable legal standard, the Court considers whether the doctrines of judicial estoppel and comity apply in this case. More specifically, the Court evaluates whether this Court should conduct its own determination of COMI under Chapter 15 or whether it should defer to prior rulings made by the Dutch courts. The Court ultimately concludes that judicial estoppel and comity should not apply here for a variety of reasons, including, but not limited to, the differences between the legal question now before this Court and the one decided by the Dutch courts.
Finally, the Court evaluates the two prongs of Section 1517(d) for terminating or modifying a prior recognition. The first of these prongs directs the Court to determine whether the grounds for granting recognition were lacking. This requires the Court to examine the record before the Court at the time it recognized Coop’s COMI as Brazil. After determining that the Court should not modify or terminate recognition under the first prong in Section 1517(d), the Court turns to the second prong in Section 1517(d). This second prong examines whether the grounds of recognition have ceased to exist. It requires the Court to examine whether events after the prior recognition have changed Coop’s COMI from Brazil to the Netherlands. In concluding that this second prong has not been met, the Court considers the economic reality of the special purpose nature of Coop, the expectations of creditors, the limitations on the Dutch Insolvency Trustee presented by the proceedings in Brazil, and allegations of impropriety against creditor Aurelius.
After a trial and extensive submissions by the parties, the Court denies the Dutch Petition for the reasons set forth below. This decision constitutes the Court’s findings of fact and conclusions of law. 2
FINDINGS OF FACT
A. The Oi Group’s Background and Structure
Incorporated under the laws of Brazil, Oi S.A. (“Oi”) is the parent company of a large telecommunications conglomerate. Proposed Joint Pre-Trial Order, Ex. A Statement of Stipulated Facts (the “Stip. Facts”) ¶ 1 [ECF No. 87]; Declaration of Antonio Reinaldo Rabelo Filho (“Rabelo Deck”) ¶ 6 [ECF No. 59]. The Oi Group has 140,000 direct and indirect employees in Brazil, including 45,125 full-time employees, as of December 31, 2015. Rabelo Decl. ¶ 5. The Oi Group reports significant operations and market share in a range of telecommunications-related services in Brazil, including (i) operation of 651,000 public telephones, more than one million public Wi-Fi hotspots in locations such as airports and shopping malls, and 330,000 kilometers of fiber optic cables; (ii) a 34.5% market share of fixed-line services including network usage, television and data transmission; and (iii) an 18.6% national market share in mobile telecommunications with 48.1 million mobile subscribers as of December 31, 2015, and network coverage of approximately 93.0% of the urban population of Brazil. Rabelo Decl. ¶ 5. Moreover, as part of its mobile business, Oi and/or its affiliates are parties to various roaming and similar contractual arrangements with other global telecommunications companies outside of Brazil. Stip. Facts ¶ 4; Declaration of Ojas N. Shah (“Shah Deck”) ¶ 11 [Case No. 16-11791, EOF No. 4], Specifically, Oi Móvel S.A. (“Oi Móvel”) is a party to roaming agreements with approximately 352 operators in over 140 countries, including in the U.S. TX 63 ¶ 33; TX 284 ¶¶18, 21; Trial Tr. 289:22-290:6, Sept. 18, 2017 (Rabelo).
Coop is a subsidiary of Oi. Stip. Facts ¶ 1. Oi has other direct and indirect subsidiaries, including (i) Telemar Norte Leste S.A. ("Telemar”), a wholly-owned subsidiary of Oi that operates a legacy landline telecommunications business; (ii) Oi Móv-el, a wholly-owned subsidiary of Telemar that operates the Oi Group’s personal mobile and cable television services; and (iii) Portugal Telecom International Finance B.V, (“PTIF”), a wholly-owned financing subsidiary of Oi. Stip. Facts ¶¶ 1, 3; Rabe-lo Decl^ 6.
B. Coop’s Background and Structure
Coop was incorporated on April 20, 2011 as a Dutch financing entity with excluded liability (eodperatie met nitgesloten aansprakelijkheid). Stip. Facts ¶ 5; Shah Decl. ¶ 30; Trial Tr. 226:11-226:14, Sept. 18, 2017 (Rabelo). Coop maintains its registered address at Strawinskylaan 3127, 1077 ZX, Amsterdam, Netherlands, which is the shared office of a trust company servicing several corporate entities. Stip. Facts ¶ 6; Trial Tr. 343:18-344:5, Sept. 18, 2017 (Rabelo); Trial Tr. 678:20-679:4, Sept. 25, 2017 (Berkenbosch). Coop’s operations are very limited. Coop has no subsidiaries (Stip. Facts ¶ 8); it has never held any equity investments (Trial Tr. 682:2-14, Sept. 25, 2017 (Berkenbosch)); it has no operations and no business independent of the Oi Group (Trial Tr. 682:15-18, Sept. 25, 2017 (Berkenbosch)); and it has never held money for any entity other than a member of the Oi Group (Trial Tr. 352:10-12, Sept. 18, 2017 (Rabelo)). Coop files financial statements with the Dutch Chamber of Commerce (Revised Direct Testimony of Jasper R. Berkenbosch (“Berkenbosch Decl.”) ¶ 10 [ECF No. 106]), pays taxes in the Netherlands (Trial Tr. 210:16-25, Sept. 18, 2017 (Rabelo)), and files tax returns with Dutch tax authorities in the Netherlands and as part of the Oi Group’s consolidated tax filings in Brazil (Berkenbosch Decl. ¶ 10; Rabelo Decl. ¶ 13). Coop has retained various professionals and advisors in the Netherlands in support of its legal and financial obligations. Stip. Facts. ¶ 9, 3
Oi is and always has been Coop’s sole member (i.e., shareholder). Stip. Facts ¶ 7. Accordingly, Oi has always held the sole authority to elect Coop’s directors. SCX 1 § 9.3. The Coop Board of Directors (the “Coop Board”) consisted of two members from the date of Coop’s incorporation until April 19, 2017 (the date of the Dutch “conversion” decision, discussed below). Stip. Facts ¶ 10. Prior to early March 2016, those two members included a Brazilian-based representative and, to satisfy the Dutch legal requirements for sufficient Dutch presence, Trust International Management B.V. a Dutch corporate entity. Trial Tr. 188:21-187:8, Sept. 18, 2017 (Rabelo). In early March 2016, Arthur José Lavatori Correa replaced T.I.M. as the second director, moving to the Netherlands to fill the role. Stip. Facts ¶ 12; Trial Tr. 187:9-20, Sept. 18, 2017 (Rabelo). Prior to serving on the Coop Board, Mr. Correa resided in Brazil. Stip. Facts ¶ 13. From the time of the Dutch “conversion” decision on April 19, 2017 until the present, the Coop Board has consisted of only one Brazilian legal entity, Bryophyta Sp Participacoes S/A. Stip. Facts ¶ 11.
From early March 2016 until late April 2017, Mr. Correa also served as Coop’s sole employee. Stip. Facts ¶ 14. Mr. Cor-rea’s employment contract directed that he work at least 40 hours a week either in the Coop office or “such other place as [Coop] may instinct” (Trial Tr. 197:19-198:21, Sept. 18, 2017 (Rabelo); TX 78 ¶ 4.1), and there is no evidence that he ever worked in the Coop office, but instead completed all work either at home or in internet cafes. Trial Tr. 345:22-346:7, Sept. 18, 2017 (Rabelo). Coop has never employed anyone else other than Mr. Correa. Stip. Facts ¶ 15; Trial Tr. 345:9-13, Sept. 18, 2017 (Rabelo); Trial Tr. 679:20-679:4 (Berkenbosch).
C. Coop’s Activities
Oi established Coop in the Netherlands as a tax-advantaged financing entity. Shah Decl. ¶¶ 30-31; Rabelo 30(b)(6) Dep. Tr. 108:25-110:2; see SCX § 10 [redacted] Through its existence, Coop has essentially performed only two functions: (i) borrowing, or issuing or assuming notes; and (ii) on-lending to the Oi Group. Trial Tr. 224:17-23; 351:20-352:4, Sept. 18, 2017 (Rabelo); Rabelo Decl. ¶¶ 8, 13; Shah Decl. ¶¶30, 35. Although its Articles of Association granted Coop the authority to take on a wider range of operations, 4 there is no evidence that it ever did so. In fact, Coop is prohibited under the provisions of one of its note indentures from engaging in any activities other than those related to borrowing and on-lending to Oi Group affiliates. 5 TX 15 § 4.17.
1. Coop Notes
Coop is presently the issuer of two series of notes: €628,112,000 of 5.625% U.S. Notes due 2021 (the “2021 Notes”), and $1,451,413,000 of 5.75% U.S. Notes due 2022 (the “2022 Notes” and, together with the 2021 Notes, the “Coop Notes”). Stip. Facts ¶ 17. The proceeds from the issuance of the 2021 Notes were transferred directly to Coop’s Itáu Nassau bank account in the Bahamas. Rabelo Decl. ¶ 22. Coop never received the 2022 Notes proceeds because it was not the original issuer, as explained below.
The 2022 Notes are governed by an indenture agreement dated February 10, 2012, and a first supplemental indenture dated July 27, 2012 (the “2022 Notes Supplemental Indenture” and, together with the prior indenture, the “2022 Notes Indenture”). Stip. Facts ¶ 18. The 2021 Notes are governed by an indenture agreement dated June 22, 2015 (the “2021 Notes Indenture” and, together with the 2022 Notes Indenture, the “Coop Notes Indentures”). Stip, Facts ¶¶ 19, 21.
Both series of Coop Notes are guaranteed by Oi. Stip. Facts ¶ 22. While the 2021 Notes were issued by Coop, the 2022 Notes were originally issued by Oi’s corporate predecessor, Brasil Telecom S.A. Stip. Facts ¶ 20. The 2022 Notes Indenture includes a provision that permits any wholly-owned subsidiary of the Oi Group to be substituted as issuer at Oi’s sole discretion and without noteholder consent, so long as Oi provides the noteholders with indemnification for certain potential disadvantageous tax consequences. TX 17 § 10.01. Coop was eventually substituted as issuer of the 2022 Notes pursuant to the execution of the 2022 Notes Supplemental Indenture. Stip. Facts ¶ 21. 6 Oi provided a guarantee on the 2022 Notes in conjunction with this substitution. Stip. Facts ¶ 21.
Both Coop Notes Indentures are governed by New York law, designate New York as the forum for any disputes related to the Coop Notes, and require that Coop maintain an office or agency in New York City for the purpose of service of process. Stip. Facts ¶ 23-24. The Bank of New York Mellon is the' indenture trustee for both series of Coop Notes. Stip. Facts ¶ 25.
The offering memoranda for both series of Coop Notes speak of the Oi Group as a single integrated operation (TX 16 at i; TX 19 at i), and the offering memorandum for the 2021 Notes extensively describes Coop’s conduit role and its complete dependence on the Brazilian Oi Group entities:
[Coop], a wholly-owned subsidiary of Oi organized under the laws of the Netherlands, has no operations other than the issuing and making payments on the Notes and other indebtedness ranking equally with the Notes, and using the proceeds therefrom as permitted by the documents governing these issuances, including lending the net proceeds of the Notes and other indebtedness incurred by [Coop] to Oi and subsidiaries of Oi. Accordingly, the ability of [Coop] to pay principal, interest and other amounts due on the Notes and other indebtedness will depend upon the financial condition and results of operations of Oi and its subsidiaries that are creditors of [Coop]. In the event of an adverse change in the financial condition or results of operations of Oi and its subsidiaries that are creditors of [Coop], these entities may be unable to service their indebtedness to [Coop], which would result in the failure of [Coop] to have sufficient funds to repay all amounts due on or with respect to the Notes.
TX 16 at 18.
The definition of “Events of Default” in the 2021 Notes Indenture includes restructuring or liquidation (“whether judicial or extrajudicial”) or “any event .,, under the laws of Brazil, the Netherlands or any political subdivision thereof [that] has substantially the same effect.” TX 15 § 6.01(9) (emphasis added). In contrast, and consistent with Oi’s corporate predecessor serving as the original issuer, the definition of “Events of Default” in the 2022 Notes Indenture reads similarly, but excludes reference to the Netherlands. See TX 17 § 6,01(8) (“any event ... under the laws of Brazil or any political subdivision thereof [that] has substantially the same effect.”). In discussing default and insolvency risk, the offering memoranda for both series of Coop Notes explicitly warn of the possibility of a Brazilian bankruptcy:
[i]f we are unable to pay our indebtedness, including our obligations under the notes, then we may become subject to bankruptcy proceedings in Brazil. Brazilian bankruptcy laws are significantly different from, and may be less favorable to creditors than, those of the United States.
TX 19 at 26; see also TX 16 at 21.
In June 2015, in conjunction with the issuance of the 2021 Notes, the Coop Board approved a resolution which contained the following language:
[Coop’s] centre of main interests (as referred to in Regulation (EC) No. 1346/2000 of the Council of 29 May 2000 on Insolvency Proceedings (as may be amended from time to time up to the date hereof) (the “EU Insolvency Regulation”)) is located in the Netherlands and the Cooperative has not or will not have an “establishment” (as defined in the EU Insolvency Regulation) in any other member state of the European Union.
TX 150 Annex ¶6. That resolution also stated that it could be relied upon by Clifford Chance LLP, counsel to the underwriting banks and investment firms participating in the initial offering of the 2021 Notes. TX 160 Annex ¶ 6; TX 304 ¶¶ 1.1-1.4, 3.10. Clifford Chance subsequently issued an opinion letter for the benefit of its clients which contained the same clause regarding Coop’s “centre of main interest” under EU law. TX 304 ¶ 3.18; Trial Tr. 257:17-261:24, Sept. 18, 2017 (Rabelo).
2. PTIF Loan
While PTIF has a similar role to Coop as a special purpose financing vehicle in the Oi Group, it has a different origin story. PTIF was formed under the laws of the Netherlands as a private entity with limited liability. Stip. Facts ¶2. Between 2013 and 2014, Oi closed on the acquisition of Portugal Telecom SGPS, S.A. (“PT”), a Portuguese telecommunications company that was the then-parent of PTIF. Rabelo Decl. ¶ 18; Berkenbosch Decl. ¶ 17. This purchase included PTIF and the obligations for certain of PTIF’s outstanding debts. Rabelo Decl. ¶ 18; Berkenbosch Decl, ¶ 17. In late 2014, Oi sold PT, while retaining PTIF as a wholly-owned subsidiary of Oi, Stip. Facts ¶2; Berkenbosch Decl. ¶ 17.
Following Oi’s sale of PT, PTIF received the proceeds from the sale of PT as repayment for its intercompany loans to its former parent. Rabelo Decl. ¶ 19; Berken-boseh Decl. ¶ 17. As a result of PTIF’s corporate structure and Dutch financial and banking regulations, PTIF was required to re-lend the PT sale proceeds to another member of the Oi Group. Rabelo Decl. ¶ 19. Accordingly, PTIF transferred the proceeds—in the amount of €4,648,-887,000—to Coop (the “PTIF Loan”) pursuant to a loan agreement between PTIF and Coop dated June 2, 2015 (the “PTIF Loan Agreement”). TX 5; Berkenbosch Decl. ¶ 18; Rabelo Decl. ¶¶ 19-20. Those funds were deposited and held in Coop’s Itaú Nassau bank account in the Bahamas until they were on-lent to Oi in 2016. Rabelo Decl. ¶ 20; Trial Tr, 329:2-331:7, Sept, 18, 2017 (Rabelo). The PTIF Loan Agreement was amended in mid-March 2016 to divide and extend the maturity of the loan across several dates. See TX 6 § 1.1 and Annex A.
3. Oi Loans
Since its formation, Coop has lent money to Oi and Oi Móvel under four loan agreements (the “Coop Loan Agreements”). TX 7-14; Berkenbosch Decl. ¶ 29; Trial Tr. 218:10-219:2, Sept. 18, 2017 (Rabelo). In late August 2012, Coop and Oi executed the first loan agreement in the amount of €1.5 billion. TX 7. In mid-June 2015, Coop and Oi executed a second agreement, which provided for Coop to loan Oi €400 million. TX 8. The second agreement was amended later that same month to increase the borrowing limit to €2 billion. TX 9. The second agreement was then amended twice more in January and March of 2016 to increase the amount of indebtedness to a total of over €2.6 billion and extend the maturity dates of certain tranches, respectively. TX 10, 11. In late February 2016, Coop and Oi executed a third loan agreement that provided for Coop to loan Oi approximately €245 million. TX 12. This third agreement was amended in mid-March 2016 to (i) change the governing law from Dutch to Brazilian law; and (ii) remove a clause that provided Coop with the right to request immediate payment of the outstanding debt under the agreement 181 calendar days after the date of disbursement. TX 13. In early March 2016,. Coop and Oi Móvel executed a final loan agreement in the amount of €1.56 billion. TX 14.
From June 2015 through the end of April 2016, a total of approximately €4,448,736,523 was transferred from Coop to Oi and Oi Móvel pursuant to the second, third, and fourth loan agreements. See Berkenbosch Decl. ¶¶ 33, 34 (totaling the loan amounts and detailing the individual transfers). As of early August 2016, the aggregate principal amount outstanding under the four intercompany loans from Coop to Oi and Oi Móvel totaled approximately €5,518,656,925. Stip. Facts ¶ 80.
On June 18, 2015, the Coop Board passed two resolutions approving two amendments to the credit facilities for the loans between (i) Coop and Oi; and (ii) Coop and PTIF, respectively. Both resolutions included the following language, similar to that used in the resolution passed in conjunction with the issuance of the 2021 Notes and Clifford Chance’s related opinion letter:
[Coop’s] centre of main interests (as referred to in Regulation (EC) No. 1346/2000 of the Council of 29 May 2000 on Insolvency Proceedings (as may be amended from time to time up to the date hereof) (the “EU Insolvency Regulation”)) is located in the Netherlands and the Cooperative has not or will not have an “establishment” (as defined in the EU Insolvency Regulation) in any other member state of the European Union.
TX 148 ¶ 6; TX 149 ¶ 6.
4. Summary of Coop’s Assets and Liabilities
Coop’s most valuable assets include the intercompany claims against Oi and Oi Móvel based on the loans described above, so-called “Pauliana” causes of action (described below) seeking the return of these same funds from Oi and Oi Móvel, a relatively small claim against Dutch tax authorities for a value-added tax (or VAT) refund, and other potential claims and causes of action. Stip. Facts ¶ 28-29, 69; Trial Tr. 703:16-704:23, 762:17-20, Sept. 25, 2017 (Berkenbosch).
As of July 7, 2017—the date this case was filed—Coop had no bank accounts in Brazil, and its cash assets consisted of: (i) a court-supervised account in the Netherlands with a current total balance of approximately €416,905; (ii) a bank account at Citibank in New York with approximately $10,000 relating to a retainer payment for White & Case; and (iii) a bank account at Citibank in New York with approximately $50,000 held in trust by Jones Day. Stip. Facts ¶¶ 26-27.
As of August 9, 2017, Coop’s debts totaled approximately €5.7 billion, consisting principally of approximately €1.9 billion outstanding under the Coop Notes, approximately €3.8 billion owed to PTIF under the PTIF Loan Agreement, and approximately €50,000 to other creditors located in the Netherlands. Stip. Facts ¶ 16.
D. Oi’s Financial Distress and the Brazilian RJ Proceeding
As early as 2015, Oi began suffering financial distress as a result of increased interest rates, “chilled foreign investment in Brazil” stemming from various national corruption scandals, increased competitive pressures, rapidly declining demand for fixed-line services (“the primary operational focus of Oi and Telemar”), and expensive government-mandated investment in negative-growth rural-area operations. TX 63 at 3-4; Berkenbosch Decl. ¶ 27. Oi’s financial concerns increased in 2016, reflected by a 168% year-over-year increase in operational losses for the January 2016 to June 2016 period, and an 1126% year-over-year increase in total loss for the same period. Berkenbosch Decl. ¶ 28. The market price for Oi’s common stock declined by approximately 90% between January 2014 and August 9, 2015. Dutch Petition ¶ 32. Credit rating agencies began downgrading the financial ratings of Oi and its affiliates around the same time, and continued warning of a “high risk of impending debt restructuring initiatives resulting in potential losses to creditors” in late 2015 and 2016. Dutch Petition ¶33.
By early June 2016, Oi retained “advis-ors to help address capital structure and liquidity concerns.” TX 151 at 6. Around that time, Oi prepared a PowerPoint presentation for bondholders with the title “Project Ocean,” which displayed the logos of the legal, financial, and restructuring advisory firms White & Case, BMA, and PJT Partners. TX 151. The presentation detailed the Oi Group’s financial distress and proposed a note exchange to address its liquidity and leverage issues. TX 151. Later that month, the Oi Group publicly disclosed its negotiations with the Steering Committee, including Oi’s proposed out-of-court restructuring plan and a counter-proposal from the Steering Committee. Stip. Facts ¶ 31.
On June 20, 2016, Oi, Oi Móvel, Coop, PTIF, Telemar, Copart 4 Participates S.A. and Copart 5 Participates S.A. (collectively, the “Brazilian RJ Debtors”) commenced a jointly administered reorganization proceeding (the “Brazilian RJ Proceeding”) in the 7a Vara Empresarial do Rio de Janeiro (Seventh Business Court of Rio de Janeiro) (the “Brazilian RJ Court”). Stip. Facts ¶ 33. The Coop Board contemporaneously approved the commencement of the Brazilian RJ Proceeding for Coop. Stip. Facts ¶ 32; TX 4 ¶ 5. The same day that the Brazilian RJ Proceeding was filed, Ojas N. Shah was appointed as the foreign representative for the Brazilian RJ Proceeding with respect to four entities—Oi, Coop, Oi Móvel, and Telemar—pursuant to resolutions and powers of attorney signed by authorized representatives of each entity. Stip. Facts ¶ 39. Later that month, the Brazilian RJ Court granted the request for the judicial reorganization of the Brazilian RJ Debtors. Stip. Facts ¶ 34. In early September 2016, the Brazilian RJ Debtors submitted a proposed restructuring plan (the “Brazilian RJ Plan”) in the Brazilian RJ Proceeding. Stip. Facts ¶ 35. In mid-March 2017, the Oi Group released the proposed economic terms of a revised plan of reorganization. Stip. Facts ¶ 36. The revised plan had not yet been filed at the time of the trial on the Dutch Petition. Stip. Facts ¶37. Creditors of Coop and PTIF have actively participated in the Brazilian RJ Proceeding, including two Aurelius-managed funds—Syzygy Capital Management, Ltd. (“Syzygy”) and Capricorn Capital Ltd. (“Capricorn”)—that have filed pleadings with and requested certain relief from the Brazilian courts. Trial Tr. 591:22-592:12, Sept. 25, 2017 (Gropper).
E, The Prior Recognition Proceeding
On June 21, 2016, one day after the Brazilian RJ Proceeding was filed, Mr. Shah filed voluntary petitions in this Court under Chapter 15 of the Bankruptcy Code on behalf of four entities: Oi, Coop, Oi Móvel, and Telemar (the “Chapter 15 Debtors”). Stip. Facts ¶40. On the same day, Mr. Shah filed a joint verified petition and motion (the “Brazilian Petition”) seeking recognition of the Brazilian RJ Proceeding for each of the Chapter 15 Debtors (Stip. Facts ¶ 41; TX 63) [Case No. 16-11791, ECF No. 3], as well as the Shah Declaration (TX 64) [Case No. 16-11791, ECF No. 4]. On June 21, 2016, this Court entered an order jointly consolidating the bankruptcy cases for the Chapter 15 Debtors under the Case Number 16-11791. [Case Number 16-11791, ECF No. 11].
The Shah Declaration informed the Court of Coop’s nature as an SPV:
Coop is a special-purpose vehicle (an “SPV”) with no ability to generate a return on cash proceeds itself, any proceeds from debt issuances at Coop must be on-lent to (eventually) an operating Oi Group entity capable of earning a profit for Coop’s creditors .... [and] Coop is also the obligor on any intra-group loans received by it from Oi Group affiliates in its capacity as an intragroup financing company in the Oi Group.
Shah Decl. ¶ 34. The Shah Declaration also stated that “[w]hen issuing long-term debt and as is customary for corporate enterprises, the Oi Group makes use of special purpose financing companies, intercompa-ny guarantees, and intercompany transfers to reduce its cost of capital.” Shah Decl. ¶ 18.
In addition, the Shah Declaration informed the Court of Coop’s ties to the Netherlands. It stated: “Coop was incorporated ... in 2011 under the laws of the Netherlands” (Shah Decl. ¶ 30; Brazilian Petition ¶ 26); “Coop maintains its registered office in the Netherlands” (Shah Decl. ¶ 31; Brazilian Petition ¶ 27); “Coop enters routine filings with the Dutch Chamber of Commerce ... files tax returns with the Dutch tax authorities, employs Baker Tilly International as auditor, and completes other ministerial activities required by Dutch law” (Shah Decl. ¶ 31; Brazilian Petition ¶ 27); “Coop hired independent Dutch counsel to ensure the protection' of its interests in a joint defense with its Oi Group affiliates” (Shah Decl. ¶ 32; Brazilian Petition ¶ 28); “Coop ... is governed by two directors, one of whom resides in the Netherlands” (Shah Decl. ¶ 31; Brazilian Petition ¶ 27); and “Coop’s board of directors .:. hold [its] meetings in the Netherlands” (Shah Decl. ¶ 32; Brazilian Petition ¶ 28).
On June 22, 2016, the Court- held a hearing on the Chapter 15 Debtors’ motion for provisional relief under Section 1519 of the Bankruptcy Code, in which they requested protection of their U.S. property under the automatic stay pursuant to Section 362 of the Bankruptcy Code, [Case No. 16-11791,. ECF No. 28]. The Court found a “risk of irreparable harm if the automatic stay” was not put into effect immediately, and was presented with no objections or claims that the stay would prejudice any parties. Hr’g. Tr. 9:8-25, June 22, 2016 [Case No 16-11791, ECF No. 28].. Accordingly, the Court granted the relief. See Order Granting Provisional Relief [Case No 16-11791, ECF No. 22].
On July 21, 2016, a hearing was held by the Court on the Chapter 15 Debtors’ request to recognize the Brazilian RJ Proceeding as a foreign main proceeding under Chapter 15 for each of the Chapter 15 Debtors, including, but. not limited to, Coop (the “Prior Recognition Hearing”). [Case No. 16-11791, ECF No. 41]. At the conclusion of the Prior Recognition Hearing, the Court granted the request, ruling as follows: .
I conclude the Brazilian RJ proceeding is ... a foreign ma[in] proceeding with respect to each of the debtors. For three of the debtors, I note that the bankruptcy code establishes a presumption that a debtor’s [ ] registered office is the center of main interest that is the COMI, and that’s true for three of these entities. And I note that the integrated OI group enterprise is managed,, directed, and monitored as a strategic whole in Brazil while major group decisions are affected at the OI group headquarters, the OI group headquarters is the corporate nerve center here.
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And in fact, I also find that Brazil is the appropriate center of main interest for the remaining entity, which is an SPV. Case law including the OAS case notes that the COMI of an SPV turns at a location of the corporate nerve center and the expectation of creditors. And here, I find that the COMI analysis for the SPV here is essentially the same as it was in OAS and I reach the same conclusion that Brazil is the appropriate place.
Hr’g Tr. 21:10-15, July 21, 2016 (citing In re OAS S.A., 533 B.R. 83, 92 (Bankr. S.D.N.Y. 2015)). On July 22, 2016, the Court entered the Order Granting Recognition of Foreign Main Proceeding and Certain Related Relief [Case No. 16-11791, ECF No. 38] (the “Prior Recognition Order”, and, together with all pleadings, hearings, and other activity in Case No. 16-11791, the “Prior Recognition Proceeding”). Stip. Facts ¶ 43.
On July 18, 2017, White & Case filed a notice titled Disclosure Pursuant to 11 U.S.C. § 1518 Regarding Substitution of Foreign Representative [Case No. 16-11791, ECF No. 79] (the “Rabelo Statement”). Stip. Facts ¶ 44. The Rabelo Statement declares that Mr. Shah’s appointment as Coop’s foreign representative was terminated pursuant to resolutions and powers of attorney executed on July 18, 2017, and that Mr. Antonio Reinaldo Rabe-lo Filho was simultaneously appointed by the Coop Board to act as Coop’s foreign representative in place of Mr, Shah. Stip. Facts ¶ 45. Mr. Rabelo was previously employed as a tax director at Oi, but left direct employment with Oi in May 2017. Stip. Facts ¶¶ 46-47.
F. Aurelius, the IBC, and the Dutch Bankruptcy Proceeding
Aurelius participated in the Prior Recognition Proceeding as an interested party and appeared at both the hearing on June 22, 2016, and the hearing on July 21, 2016. See Motion for Admission to Practice, Pro Hac Vice [Case No. 16-11791, ECF No. 44]. Aurelius did not object to the recognition of Brazil as the COMI for any of the Chapter 15 Debtors, including Coop. It also did not file any pleadings beyond its motion for admission. But Aurelius requested that certain language be included in the order granting provisional relief under Section 1519; the language provided that the interim stay would not apply to actions and property outside the United States and, in particular, the Netherlands. Hr’g Tr. 7:24-8:15 June 22, 2017. The Court’s order granting Section 1519 relief included the language Aurelius requested. See Order Granting Provisional Relief ¶ 1. Aurelius sought and received the inclusion of similar language in the proposed recognition order, resulting in a stipulation that, among other things, the stay under Section 1520 would apply only to actions and property within the United States. See Hr’g Tr. 9:23-10:15 July 21, 2017.
Notwithstanding its lack of objection to recognition of the Brazilian RJ Proceeding as the foreign main proceeding for Coop, “[i]t was always [Aurelius’] understanding and expectation that Coop would be reorganized in the Netherlands pursuant to the laws of the Netherlands.” Trial Tr. 636:19-637:25, Sept. 25, 2017 (Gropper). This was true even at the time of the Prior Recognition Hearing. See id. Indeed, the same day that the Prior Recognition Order was entered, Aurelius distributed a memo “inviting] dialog with holders of more than $50MM face amount of PTIF/[Coop] notes who are heavily weighted toward those notes—meaning that they hold a much larger percentage of the outstanding PTIF/[Coop] notes than of the outstanding Telemar notes.” OX 73 at 4. This memo argued that initial restructuring negotiations between the Oi Group and some of its creditors had undervalued the PTIF and Coop Notes, and directed interested parties to contact Aurelius. Id, at 3; Trial Tr. 603:24-604:22, Sept. 25, 2017 (Gropper). As of the date of this memo, Aurelius held only [redacted] of Coop Notes on a notional basis. IBCX 20 at 2. 7
Aurelius began taking legal action against Coop in the Netherlands weeks before the events in New York. In the spring of 2016, Aurelius began pursuing actions in the Dutch courts to enjoin the on-lending and transfer of funds from Coop to Oi under their loan agreements. Shah Deck - ¶¶ 56-57. These actions- were ultimately unsuccessful. Shah Deck ¶¶ 57-58; SCX 3. In addition, on June 27, 2016, shortly after the filing of the Brazilian Petition, but before the Prior Recognition Hearing, the Aurelius-managed fund Syzy-gy filed an involuntary bankruptcy petition against Coop in the Netherlands. Stip. Facts ¶¶ 49-51. This was followed by the filing of three additional involuntary petitions against Coop in the Netherlands in July 2016 by three different groups of creditors. Stip. Facts ¶¶ 49-51.
In the Prior Recognition Proceeding, the Court was informed of these involuntary petitions through a second declaration from Mr. Shah filed a little more than a week before the Prior Recognition Hearing. [Case No. 16-11791, ECF No. 32 ¶ 21]; see also Hr’g Tr. 8:16-25, July 21, 2017. In a subsequent declaration filed approximately one month after the Prior Recognition Order was entered, Mr. Shah informed this Court that following the involuntary filings against Coop in the Netherlands, Coop had filed its own petition for a suspension of payments proceeding in the Netherlands (as discussed further below). Third Deck Notifying Court of a Change of Status ¶ 5 [Case No. 16-11791, ECF No. 48].
Dutch bankruptcy proceedings are governed by two legal regimes, the EU regime established by the European Insolvency Regulation (the “EU Regulation”) enacting the European Union Convention on Insolvency, and the Dutch national regime established by the Dutch Bankruptcy Act (the “DBA”). Berkenbosch Deck ¶ 115; Declaration of Paul Michael Veder (“Veder Deck”) ¶¶ 12-15 [ECF No. 105-1]. When opening an insolvency proceeding, such as the one involving Coop, a Dutch court is obligated to sua sponte determine and declare which regime provides the basis for its jurisdiction. Berkenbosch Deck ¶ 116; Veder Deck ¶ 14. There are three bases for jurisdiction under the EU Regulation and DBA. First, under the EU regime, a Dutch court can open a “main” proceeding if the debtor’s COMI under the EU Regulation is found to be within the Netherlands. Id. Second,-the court can open a “secondary” or “territorial” proceeding if it finds that the debtor has its COMI under the EU Regulation in a different EU member state, but has an “establishment” in the Netherlands. Id. Third, if the Dutch court finds a debtor’s COMI under the EU Regulation to be outside the EU, it may instead have jurisdiction under the DBA so long as the debtor either (1) has “domicile (woonplaats)” in the Netherlands; or (2) maintains an “office (kantoor)” in the Netherlands. Berkenbosch Deck ¶ 117; Veder Deck ¶ 34. For the purpose of the DBA, a legal entity has domicile in the same state as its statutory seat. Id.
The primary difference in finding jurisdiction under the EU Regulation rather than the DBA is the automatic recognition granted to the proceeding by other EU member states. Trial Tr, 394:22-396:22, Sept. 19, 2017 (Veder); Berkenbosch Decl. ¶ 126. By contrast, Dutch insolvency proceedings under the DBA generally can receive recognition in other European nations only on a nation-by-nation basis using each nation’s idiosyncratic legal protocols, although some member states—such as Germany—do still provide automatic recognition to Dutch insolvency proceedings under the DBA. Trial Tr. 395:9-396:10, 400:14-401:21, Sept. 19,2017 (Veder)..
Notably, even if COMI under the EU Regulation is found to be in the EU, the Dutch courts offer the same forms of relief for cases opened under the DBA. Berken-bosch Deck ¶ 120. In both cases, Dutch law contemplates two forms of insolvency proceedings for companies: “suspension of payments (swrseance van betaling) and bankruptcy (faillissement).” Veder Deck ¶ 37. Initiation of a suspension of payments (“SoP”) instates a general moratorium on all actions by unsecured ordinary creditors and restricts debtors from performing acts of “administration or disposal” with regard to the estate “without cooperation, authorization or consent of the administrator.” Berkenbosch Deck ¶ 130. In contrast, in a bankruptcy proceeding, an insolvency trustee becomes exclusively authorized to manage the estate. Berkenbosch Deck ¶ 146.
While bankruptcy proceedings can be initiated upon the request of either a debt- or or creditor, a SoP can only be granted at the request of the debtor. Veder Deck ¶ 37. Accordingly, a Dutch court makes an initial determination regarding a SoP petition without holding a hearing or recéiving input from creditors, shareholders, or other stakeholders. Berkenbosch Deck ¶ 132; Veder Deck ¶ 38. Upon request for a SoP proceeding, the Dutch court is obligated to grant a preliminary SoP if various initial criteria are met. Veder Deck ¶ 38. Specifically, a SoP petition must contain evidence demonstrating that the debtor anticipates being unable to continue paying its debts as they fall due, and must include such documents as a balance sheet and a list of known creditors with their contact details. Veder Deck ¶ 38. The SoP petition and any enclosed documents (e.g., a proposed composition plan) are subsequently made pub-lically available. Berkenbosch Deck ¶ 132. After granting the provisional SoP, a Dutch court will generally also grant a definitive SoP unless (1) a qualified majority of the unsecured ordinary creditors object; (2) there is a well-founded suspicion that the debtor will prejudice the interests of creditors; or (3) there is no prospect of the debtor being able to satisfy its creditors within a certain period of time. Berk-enbosch Deck ¶ 133.
Right after the filing of the first Dutch involuntary petition by Syzygy, Oi prepared a PowerPoint presentation dated June 30, 2016 and titled “Projeto Océano.” TX 152. The appendix of the PowerPoint addresses plans for the potential filing of insolvency proceedings across several jurisdictions, including timelines and descriptions of how those filings could interact. In discussion of a potential Dutch filing, the presentation reads as follows:
[The Brazilian RJ Proceeding] will not be recognized in the Netherlands therefore if creditors take action in the Netherlands, [Coop] will have to file for an additional insolvency proceeding, Suspension of Payments, to ensure they are protected in the Netherlands, Please note the current intention is that this will be used as a defensive measure only. An illustrative timeline is on the next slide.
TX 152 at Bates OiSA-0000579.
In fact, on July 26, 2016, the Coop Board petitioned for appointment of a silent administrator for Coop in the Netherlands. Stip. Pacts ¶ 52. Silent administration is primarily used to gather information about an entity while preparing it for an insolvency proceeding. Berkenbosch Decl. ¶ 49. On July 28, 2016, the Dutch District Court appointed Mr. Jasper Berkenbosch to the administrator post. Stip. Facts ¶53. Mr. Berkenbosch used the period of his appointment to “familiarize [him]self with Coop and the other Brazilian RJ Debtors by, among other methods, communicating with the Coop Board and its Dutch legal counsel.” Berkenbosch Deck ¶ 49.
On August 9, 2016, the Coop Board petitioned for a provisional SoP on an ex parte basis by filing a petition (the “SoP Petition”) with the Dutch District Court. Stip. Facts ¶ 54. At 9:30AM the same morning, the Dutch District Court entered its order granting the SoP Petition (the “SoP Commencement Order”) and commencing Coop’s SoP proceeding (the “SoP Proceeding”). Trial Tr. 801:19-802:6, Sept. 25, 2017 (Berkenbosch); Stip. Facts ¶ 56. Coop filed the SoP Proceeding to facilitate its reorganization rather than its liquidation. TX 67 ¶5. In fact, the SoP Petition included a draft “composition plan” that proposed to incorporate the recoveries offered to creditors under the Brazilian RJ Plan. Stip. Facts ¶ 55; TX 26 Annex 13. A composition plan is the Dutch restructuring alternative to a liquidation and requires adoption by creditors and confirmation by a Dutch court. Trial Tr. 699:16-24, Sept. 25, 2017 (Berkenbosch). Pursuant to the SoP Commencement Order, the Dutch District Court appointed Mr. Berkenbosch as Coop’s administrator (in such capacity, the “SoP Administrator”) and Mr. W.F. Kor-thals Altes as the supervisory judge (the “Dutch Supervisory Judge”). Stip. Facts ¶ 57.
Shortly after Mr. Berkenbosch’s appointment as SoP Administrator, Aurelius initiated a campaign of frequent and aggressive contact with Mr. Berkenbosch to convince him to move for the withdrawal of the SoP Proceeding and conversion to a Dutch bankruptcy, including by repeatedly critiquing his performance as SoP Administrator and reminding him of his fiduciary duties. Trial Tr. 617:10-18, 618:13-20, 619:3-23, 620:14-621:11, Sept. 25, 2017 (Gropper); OX 4, 7, 9, 16, 27 (counsel letter on behalf of the IBC); Trial Tr. 816:11-19, Sept. 25, 2017 (Berkenbosch); SCX 6. Representatives of Aurelius actually apologized twice for the contents of these communications after Mr. Berken-bosch took actions several weeks later that were in line with Aurelius’ demands. Berk-enbosch Deck 1156 n.87; Trial Tr. 621:22-24, 640:13-641:20, 659:11-660:22, Sept 25, 2017 (Gropper); id. 767:15-769:4 (Berkenbosch).
Consistent with Aurelius’ requests, Mr. Berkenbosch, in his capacity as SoP Administrator, and certain members of the IBC filed requests in early December 2016 to convert Coop’s SoP Proceeding to a Dutch bankruptcy proceeding (collectively, the “Coop Conversion Requests”). Stip. Facts ¶ 58; TX 309.
The hearing on the Coop Conversion Requests took place before the Dutch District Court in early January 2017 (the “Conversion Hearing”). Stip. Facts ¶ 60. Whether requested by a debtor or a creditor, hearings held to determine whether to convert a SoP proceeding and/or open a bankruptcy proceeding generally occur in chambers (in raadkamer). Veder Written Direct ¶¶ 39-40; Berkenbosch Deck ¶ 140. In cases stemming from creditor requests, the district court will summon the petitioner and debtor, and may call the administrator and other creditors or relevant parties sua sponte or if the creditors have filed parallel bankruptcy requests. Id.; Berkenbosch Deck ¶ 140. Either the Dutch court or the administrator may notify creditors that they will be provided an opportunity to participate. Berkenbosch Decl. ¶ 140. In Coop’s case, the Conversion Hearing was attended by Mr. Berkenbosch with counsel from Jones Day, the PTIF administrator, 8 counsel for Coop, and counsel for various creditors, including members of the IBC, certain Italian notehold-ers, and GoldenTree Asset Management LP, a member of the Steering Committee. Berkenbosch Decl. ¶ 78; Van Agteren 30(b)(6) Dep. Tr. 83:8-84:10.
In early February 2017, the Dutch District Court denied the Coop Conversion Requests (the “Conversion Denial Decision”). Stip. Facts ¶ 61. A little more than a week later, four creditors of Coop, including the Aurelius-managed fund Syzygy, appealed the Conversion Denial Decision to the Dutch Court of Appeals. Stip. Facts ¶ 63; Veder Decl. ¶ 57. Three of these creditors, including Syzygy, are members of the IBC. IBCX 45 n.2; Trial Tr. 769:17-24, Sept. 25, 2017 (Berkenbosch). Mr. Berkenbosch did not appeal. Stip. Facts ¶ 62. Coop filed a response to the appeal on March 22, 2017. TX. 421. [redacted]
A hearing on the appeal took place in late March 2017 (the “Dutch Court of Appeals Hearing”). Stip. Facts ¶ 64. Counsel to the Coop Board attended [redacted] On April 19, 2017 (the “Conversion Date”), the Dutch Court of Appeals issued a decision overturning the Conversion Denial Decision, converting Coop’s SoP Proceeding to a Dutch bankruptcy proceeding (the “Dutch Bankruptcy Proceeding”), and appointing Mr. Berkenbosch as Coop’s Insolvency Trustee. Stip. Facts ¶ 65.
At the beginning of May 2017, Coop appealed the Dutch Court of Appeals’ legal conclusions to the Dutch Supreme Court. Stip. Facts ¶ 66. The hearing on that appeal took place in the middle of June 2017. Stip. Facts ¶ 67. In its written pleadings, Coop challenged the Dutch Court of Appeals decision in part on procedural grounds, arguing that “the Court of Appeals ought to have summoned all the creditors in order to be heard and not allowed interested parties other than creditors to be heard.” TX 3 § 3.4.1. The Dutch Supreme Court rejected this claim, interpreting Dutch law to oblige the court to summon only “the petitioner, the debtor and the administrator” and allowing the court to also “summon[ ] and hear[ ] other interested parties, such as (other) creditors or companies associated with the debtor” at its discretion. TX 3 § 3.4.2; see also Berkenbosch Decl. ¶ 190. [redacted] On July 7, 2017, the Dutch Supreme Court affirmed the Dutch Court of Appeals decision. Stip. Facts ¶ 68,
G. The Authority and Activities of the Dutch Insolvency Trustee
Under Dutch law, as under the U.S. Bankruptcy Code, commencement of a bankruptcy proceeding transfers certain powers away from the pre-insolvency debtor and its management team. Most significantly, “the debtor—and its board of directors—is no longer authorized to manage and dispose of the assets composing the insolvent estate.” Berkenbosch Decl. ¶ 156. Rather, only the insolvency trustee is empowered to “preserve, collect and liquidate all of the debtor’s assets for distribution to creditors through the bankruptcy proceeding.” Berkenbosch Deck ¶ 157; Supplemental Declaration of Paul Michael Veder (“Veder Sup. Decl.”) ¶ 12. The insolvency trustee gains exclusive authority to commence proceedings or bring and defend against any legal action on behalf of the estate. Berkenbosch Decl. ¶ 156; Veder Sup. Decl. ¶ 12. Additionally, “any powers of attorney made by a debtor or its board of directors are automatically terminated by operation of law.” Berkenbosch Decl. ¶ 157.
The debtor and not the insolvency trustee, however, remains the “legal owner” of the assets of the bankruptcy estate. Veder Sup. Decl. ¶ 11. The insolvency trustee is only appointed to administer the bankruptcy estate, not the “legal person of the debtor,” and the debtor and its “corporate bodies (organen)” retain existence during the bankruptcy. Veder Decl. ¶¶ 60-61 (emphasis in original); Berkenbosch Deck ¶ 158. “The debtor’s management board and supervisory board remain in place, as do any internal corporate groups (such as a works council that looks after the interests of employees).” Veder Decl. ¶ 62.
“[T]he insolvency trustee is not entitled to dismiss or appoint management board members.” Berkenbosch Decl. ¶ 158. The board of directors retains authority to call a general meeting of shareholders. Berkenbosch Decl. ¶ 158. The shareholders (or members) retain their equity holdings and their exclusive ability to amend the debt- or’s articles of association. Veder Decl. ¶¶ 62-63. More practically, while a debtor or its directors “may in principle still enter into agreements with third parties—loan agreements, for example—such agreements do not automatically bind the estate; the estate would only be liable in respect of such an agreement to the extent that the estate benefitted therefrom.” Veder Sup. Decl. ¶ 12 [ECF No. 105-2].
The debtor also remains a distinct legal entity for the purposes of participation in the bankruptcy proceedings themselves, and may retain its own counsel, legal, financial or otherwise. Berkenbosch Decl. ¶ 158; Veder Sup. Decl. ¶ 19. The debtor may submit to the supervisory judge “article 69” petitions under Dutch law to challenge actions of the insolvency trustee. Berkenbosch Decl. ¶ 159; Veder Decl. ¶ 64. The debtor can even request that the supervisory judge dismiss or replace the insolvency trustee. Veder Decl. ¶ 64. Likewise, any creditor or creditor committee is empowered to challenge the acts of an insolvency trustee with the supervisory judge and request an order- directing the insolvency trustee to “commit or omit a certain act.” Berkenbosch Decl. ¶ 166. The debtor also has a right to challenge creditor claims during the “verification” process or request amendments to the report of the creditors’ meeting. Veder Decl. ¶¶ 64-66.
Most significantly, the board remains “solely entitled to offer a composition plan under Dutch law to the unsecured ordinary creditors on behalf of the debtor.” Berkenbosch Decl. ¶ 161. This is because under Dutch law, “the composition plan is considered a contract between the debtor and its creditors.” Veder Decl. ¶ 66, The insolvency trustee offers advice on the composition plan to the creditors, but cannot vote on the plan with the creditors. Veder Sup. Decl. ¶ 14. A plan is adopted “if more than 50 percent of the total amount of ordinary unsecured creditors present at the meeting where the plan is voted on, which together represent at least half of the total amount of ordinary unsecured claims outstanding, accept the plan.” Berkenbosch Decl. ¶ 161. Notably, the board is not allowed to unilaterally bind the Dutch estate by voting in support of a plan of reorganization in a foreign proceeding that affects the estate assets. See TX 3 § 3.8.2.
Mr, Berkenbosch has taken several actions on behalf of the Coop Dutch bankruptcy estate in his roles as SoP Administrator and Insolvency Trustee. First, Mr. Berkenbosch has issued several communications to Coop creditors in the form of public reports and notices on the status of Coop’s insolvency proceedings and the proposed composition plan as required under Dutch law. Berkenbosch Decl. ¶ 59; TX 29-34; TX 162 Arts. 73a and 227. Some of the reports were published online and are accessible on the Central Insolvency Register in the Netherlands (TX 38 ¶ 1.3; TX 40 ¶ 1.3; Berkenbosch Deck ¶ 112), as well as on a website Mr. Berkenbosch has maintained in his capacity as SoP Administrator and Insolvency Trustee. Berkenbosch Decl. ¶ 59.
Mr. Berkenbosch has engaged in multiple written, electronic, and in-person communications with Oi and the Coop Board. TX 30 ¶ 1.1, TX 82-87; Trial Tr. 701:23-702:9, Sept. 25, 2017 (Berkenbosch); Berk-enbosch Deck ¶¶63, 65-70. Among other things, Mr. Berkenbosch has held video-conferences and in-person meetings with the Coop Board and Oi executives, as well as their Dutch, Brazilian and U.S. counsel, in Brazil, Portugal, London and the Netherlands, TX 30 ¶ 1.1; Berkenbosch Deck ¶¶63, 66, 70. Mr. Berkenbosch has also sent Oi and the Coop Board a number of letters expressing his concerns and requests regarding the restructuring proceeding in Brazil. See, e.g., TX 82-87; Berkenbosch Deck ¶¶ 63, 65, 68-70.
Mr. Berkenbosch has also responded to and satisfied requests for payment of Coop’s day-to-day debts and expenses. See Declaration of Corinne Ball (“Ball Deck”) Ex. S [ECF No. 73] (November 30, 2016 email to J. Berkenbosch from Coop Board member requesting authorization of salary payment); id. Ex. T (January 25, 2017 email from J. Berkenbosch to RESOR and Coop Board member granting authorization for payment to the Coop Board’s Dutch counsel).
Separate and apart from the Dutch insolvency proceedings, Mr. Berkenbosch has initiated actions in the Dutch courts on behalf of the Coop Dutch bankruptcy estate. In late May 2017, the Insolvency Trustee commenced a Dutch Pauliana action on behalf of the Dutch bankruptcy estate of Coop against Oi and Oi Móvel (the “Pauliana Proceeding”). Stip. Facts ¶ 69. Mr. Berkenbosch reports the goal of this action to be the “unwinding [of] the 2016 loans from Coop to Oi Móvel.” Berk-enbosch Deck ¶ 25. 9 On August 2, 2017, the Amsterdan} District Court in which the Pauliana Proceeding was filed rejected Coop’s request to join as a separate, interested party:
The bankrupt debtor remains authorized to act as claimant or defendant insofar as it concerns claims that do not involve the estate. However, the claims in the main action and in the interim action concern claims “that have rights or obligations that belong to the insolvent estate as their subject” (article 25 Dutch Insolvency Act). It does not fit within the system of the law.
Berkenbosch Deck ¶ 160. The Insolvency Trustee has also pursued a claim on behalf of Coop’s estate against the Dutch tax authorities for a VAT (value added tax) refund of approximately €160,846. Berken-bosch Deck ¶ 26; Dutch Petition ¶ 30.
Mr, Berkenbosch has also taken action in the Brazilian RJ Proceeding. Following the conversion order issued by the Dutch courts, the Brazilian RJ Court issued an order in mid-May 2017 (the “Brazilian Injunction Order”) to prohibit Mr. Berken-bosch from taking actions which would disrupt the Brazilian RJ Proceeding. The injunction of the Brazilian RJ Court ordered:
under penalty of R$ 800,000.00 per event of non-compliance, that the Dutch Jas, Messrs. Jasper Berkenbosch and J.L.Groenewgen fully respect the decisions of the Brazilian law and, among other things, abstain from performing any act aimed at: (a) imposing or preventing an action or omission by the directors of [Coop] or PTIF or any representative[;] (b) performing or cooperating in the performance of any act that tends to encumber, assign, transfer or in any way alienate the assets of [Coop] and PTIF, in any jurisdiction, authoris-ing the payment of everyday expenses, all under penalty of personal responsibility; and (c) using the cash of [Coop] and PTIF to pay attorneys fees, Brazilian or foreign who acted and act on behalf of the conversion into bankruptcy of the Dutch companies.
TX 53 at Bates OI-TRUSTEE-000001303; see also Declaration of Sergio Ricardo Savi Ferreira (“Ferreira Decl.”) ¶¶ 6-9 [ECF No. 105-3]; Declaration of Giuliano Colombo (“Colombo Decl.”) ¶34 [ECF No. 105-7]; Declaration of Sheila Christina Neder Cerezetti (“Cerezetti Deck”) ¶ 56 [ECF No. 81]. The Insolvency Trustee has appealed this decision multiple times, earning at least partial relief in June 2017 as to assets located outside of Brazil. 10 In addition, Mr. Berkenbosch has obtained orders in the Brazilian RJ Proceeding requiring the Brazilian RJ. Debtors to provide separate creditor lists (TX 471), and to allow creditors to have a non-consolidated vote on the proposed consolidation (TX 485; Trial Tr. 785:12-19, 786:14-17, 828:12-829:4, Sept. 25, 2017 (Berkenbosch)).
In early July 2017, the Insolvency Trustee received approval from the Dutch Supervisory Judge to commence the current Chapter 15 proceeding on behalf of Coop. Berkenbosch Decl. ¶ 99. On July 7, 2017, the Insolvency Trustee filed the Dutch Petition. Stip. Facts ¶ 70. On July 31, 2017, the Insolvency Trustee filed a supplement to the Dutch Petition [ECF No. 23]. Stip. Facts ¶ 71. To fund his various actions on behalf of the Coop Dutch bankruptcy estate, the Insolvency Trustee borrowed $5 million from the IBC under a credit facility entered into on July 4, 2017. Rabelo Decl. ¶ 9; TX 58. Before accepting that financing, Mr. Berkenbosch contacted a number of other potential lenders, including Oi, the PTIF insolvency trustee, the Steering Committee, and other “third-party litigation funders.” Berkenbosch Decl. ¶ 100; Trial Tr. 700:17-701:12, Sept. 25, 2017 (Berkenbosch); TX 119 at 1, 6-7.
H. The Current Proceedings
The Court held a trial on the Dutch Petition on September 18, 19, 25 and 26, 2017. See Notice of Filing of Evidentiary Hearing Transcripts [ECF No. 124], During the four days of trial, the.Court heard testimony from four witnesses: Mr. Rabe-lo, Mr. Berkenbosch, Mr. Dan Gropper (an Aurelius managing director), and Professor Paul Michael Veder (an expert on Dutch insolvency law offered by Oi). By agreement of the parties and pursuant to the Court’s instruction, direct testimony of those witnesses was presented in written form and each appeared at trial for cross-examination and re-direct examination. Also by agreement of the parties and pursuant to the Court’s direction, the Court accepted deposition designations in lieu of live testimony for three Brazilian law experts and three fact witnesses: Giuliano Colombo (Brazilian law expert for the Steering Committee), Professor Sheila Cerezetti (Brazilian law expert for Mr. Berkenbosch), Sergio Ricardo Savi Ferreira (Brazilian law expert for Oi), 11 Erick Alberti (financial advisor to the Steering Committee), Patrick Dyson (partner at an individual fund in the Steering Committee), Van Agteren (attorney and 30(b)(6) witness for the Steering Committee). In addition to the witness testimony, the Court heard argument of counsel, admitted exhibits into evidence, and accepted a stipulation from the parties with agreed-upon facts. After the trial, the parties submitted proposed findings of fact and conclusions of law. See Movants’ Proposed FoF and Movants’ Proposed CoL [ECF No. 120]; Objectors’ Proposed FoF and CoL [ECF No'. 121].
CONCLUSIONS OF LAW
A. Chapter 15 and COMI Generally
Chapter 15 of the Bankruptcy Code was enacted by Congress as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub. L. No. 109-8, 119 Stat. 23. Chapter 15 implemented the Model Law on Cross-Border Insolvency (the “Model Law”), promulgated by the United Nations Commission on International Trade Law (“UNCITRAL”). See H.R. REP. No. 109-31, at 105-07 (2005), reprinted in 2005 U.S.C.C.A.N. 88; In re Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd. (In Provisional Liquidation), 374 B.R. 122, 126 (Bankr. S.D.N.Y. 2007). The stated purpose of Chapter 15 “is to incorporate the Model Law on Cross-Border Insolvency so as to provide effective mechanisms for dealing with cases of cross-border insolvency,” with the related goals of promoting cooperation between U.S. and foreign courts, greater legal certainty for trade and investment, fair and efficient administration of cross-border insolvencies that protects the interests of all creditors and other interested entities, including the debtor, protection and maximization of a debtor’s assets, and the rescue of financially troubled businesses. 11 U.S.C. § 1501 (a).
When interpreting Chapter 15, the statute directs that “the court shall consider its international origin, and the need to promote an application - of this chapter that is consistent with the application of similar statutes adopted by foreign jurisdictions.” 11 US.C. § 1508. “As each section of Chapter 15 is based on a corresponding article in the Model Law, if a textual provision of Chapter 15 is unclear or ambiguous, the Court may then consider the Model Law and foreign interpretations of it as part of its ‘interpretive task.’ ” In re OAS, 533 B.R. at 92 (quoting O’Sullivan v. Loy (In re Loy), 432 B.R. 551, 560 (E.D. Va. 2010)). Legislative history also recommends consulting the Guide to Enactment of the UNCITRAL Model Law on Cross-Border Insolvency, U.N. Gen. Ass., UNCITRAL 30th Sess., U.N. Doc. A/CN.9/442 (1997) (the “Guide”), promulgated by UNCITRAL, “for guidance as to the meaning and purpose of [Chapter 15's] provisions.” H.R. Rep. No. 109-31, pt. 1, at 106 n.101 (2005); see also Morning Mist Holdings Ltd. v. Krys (In re Fairfield Sentry Ltd.), 714 F.3d 127, 136 (2d Cir. 2013). While the statutory text of Chapter 15 controls, international sources may be considered to the extent they assist in “carrying] out the congressional purpose of achieving international uniformity in cross-border insolvency proceedings.” In re Fairfield Sentry, 714 F.3d at 136 .
A Chapter 15 case is commenced by the foreign representative of a debtor filing a petition for recognition of a foreign proceeding. See 11 U.S.C. §§ 1504 ,1515(a). The petition must be accompanied by certain evidentiary documents that are presumed authentic in the absence of contrary evidence. See 11 U.S.C. §§ 1515 (b), 1516(b); In re Bear Stearns, 374 B.R. at 128 .
Section 1517 of the Bankruptcy Code identifies the requirements for recognition of a foreign proceeding. It provides that
an order recognizing a foreign proceeding shall be entered if—
(1) such foreign proceeding ... is a foreign main proceeding or foreign non-main proceeding within the meaning of [S]ection 1502;
(2) the foreign representative applying for recognition is a person or body; and
(3) the petition meets the requirements of [S]ection 1515.
11 U.S.C. § 1517 (a). A recognition must be identified as either a main or a nonmain proceeding. See In re Bear Stearns, 374 B.R. at 126-27 , “A simple recognition of a foreign proceeding without specifying more (i.e., non-declaration as to either ‘main or nonmain’) is insufficient as there are substantial eligibility distinctions and consequences.” Id. at 127 . For instance, upon the recognition of a foreign main proceeding, Section 1520 of the Bankruptcy Code provides certain “automatic, non-discretionary relief,” including imposition of an automatic stay with respect to the debtor and its property located within the United States. In re Fairfield Sentry, 714 F.3d at 133 ; 11 U.S.C. § 1520 (a). A stay is also available on a discretionary basis upon the recognition of a foreign main or a foreign nonmain proceeding. 11 U.S.C. § 1521 (a).
Recognition is mandatory if all three requirements of Section 1517(a) are met. See 11 U.S.C. § 1517 (a) (“[Recognition of a foreign proceeding shall be entered ... ”); see also In re Creative Fin., Ltd. (In Liquidation), 543 B.R. 498, 516 (Bankr. S.D.N.Y. 2016). “But recognition is not a ‘rubber stamp exercise,”’ and the burden rests on the foreign representative to prove each of the requirements of Section 1517. In re Creative Fin., 543 B.R. at 514 (internal citations omitted). Additionally, recognition is subject to termination or modification “if it is shown that the grounds for granting it were fully or partially lacking or have ceased to exist.” 11 U.S.C. § 1517 (d). However, “in considering such action the court shall give due weight to possible prejudice to parties that have relied upon the order granting recognition.” Id.
Section 1506 of the Bankruptcy Code includes an overriding public policy exception, providing that a court may refuse to take an action under Chapter 15 if such action “would be manifestly contrary to the public policy of the United States.” 11 U.S.C. § 1506 . The exception is read narrowly, with legislative history stating that “the word ‘manifestly1 in international usage restricts the public policy exception to the most fundamental policies of the United States.” In re Fairfield Sentry, 714 F.3d at 139 (emphasis in original) (quoting H.R. Rep. No. 109-31, pt. 1, at 109 (2005)). Thus, “even the absence of certain procedural or constitutional rights will not itself be a bar under [Section] 1506.” In re OAS, 533 B.R. at 104 (quoting In re Vitro S.A.B. de CV, 701 F.3d 1031, 1069 (5th Cir. 2012)). This Court has previously held that “Brazilian bankruptcy law meets our fundamental standards of fairness and accords with the course of civilized jurisprudence.” In re OAS, 533 B.R. at 103 (quoting In re Rede Energia S.A., 515 B.R. 69, 98 (Bankr. S.D.N.Y. 2014)) (discussing Section 1506 in the context of, among other things, a request for substantive consolidation of the debtors’ assets and liabilities for plan purposes in a Brazilian proceeding). Indeed, “Brazil has a comprehensive bankruptcy law that in many ways mirrors our own.” Id. at 103-04 (describing similarities between Brazilian and U.S. insolvency law).
A foreign main proceeding is defined as “a foreign proceeding pending in the country where the debtor has the center of its main interests,” referred to as “COMI.” 11 U.S.C. § 1502 (4). A foreign nonmain proceeding is “a foreign proceeding, other than a foreign main proceeding, pending in a country where the debtor has an establishment.” 11 U.S.C. § 1502 (5). An establishment means “any place of operations where the debtor carries out a nontransito-ry economic activity.” 11 U.S.C. § 1502 (2).
The Bankruptcy Code neither defines COMI, nor prescribes the evidence that should be considered in making a determination of where a debtor’s COMI is located. See In re Creative Fin., 543 B.R. at 517 . “Because COMI is not statutorily defined, courts are free to develop and consider the particular factors that may be relevant, dependent upon the facts and circumstances present.” Id. at 517 . Several factors applicable to a COMI determination were identified in the case of In re SPhinX, Ltd., which stated:
[v]arious factors, singly or combined, could be relevant to such a determination: the location of the debtor’s headquarters; the location of those who actually manage the debtor (which, conceivably could be the headquarters of a holding company); the location of the debtor’s primary assets; the location of the majority of the debtor’s creditors or of a majority of the creditors who' would be affected by the case; and/or • the jurisdiction whose law would apply to most disputes.
351 B.R. 103, 117 (Bankr. S.D.N.Y. 2006). Also subject to consideration is “a debt- or’s ‘nerve center,’ including from where the debtor’s activities are directed and controlled.” In re Fairfield Sentry, 714 F.3d at 138 n.10. The Second Circuit has cited the SPhinX factors as “a helpful guide,” but noted that “consideration of these specific factors is neither required nor dispositive” and that “any relevant activities, including liquidation activities and administrative functions, may be considered in the COMI analysis.” Id. at 137 . The Second Circuit has also noted that the EU Regulation states that COMI “should correspond to the place where the debtor conducts the administration of his interest on a regular basis and is therefore ascertainable by third parties.” Id. at 138 (quoting EU Regulation, Preamble ¶ 13). This “underscores the importance of factors that indicate regularity and ascer-tainability.” Id. The Second Circuit recognized, however, that “[t]he absence of a statutory definition for a term that is not self-defining signifies that the text is open-ended, and invites development by courts, depending on facts presented, without prescription or limitation.” Id. at 138 .
The Second Circuit has held that “a debtor’s COMI is determined based on its activities at or around the time the Chapter 15 petition is filed ....” In re Fairfield Sentry, 714 F.3d at 137 ; see also id. at 133-34 . Thus, a court making a COMI determination should not conduct an inquiry into a debtor’s entire operational history. See id. at 134 (citing In re Ran, 607 F.3d 1017, 1025 (5th Cir. 2010)). But “[t]o offset a debtor’s ability to manipulate its COMI, a court may consider the period between the commencement of the foreign insolvency proceeding and the filing of the Chapter 15 petition.” Id. at 137; see also In re Ran, 607 F.3d at 1026 .
Section 1516(c) provides that “[i]n the absence of evidence to the contrary, the debtor’s registered office ... is presumed to be” the debtor’s COMI. 11 U.S.C. § 1516 (c). But this presumption is rebuttable, and is only applied “[flor speed and convenience in instances in which the COMI is obvious and undisputed.” In re Creative Fin., 543 B.R. at 514-15 ; see also In re SPhinX, 351 B.R. at 117 (citing legislative history). Moreover, the presumption “is especially inappropriate in a case where there is a substantial dispute.” In re Creative Fin., 543 B.R. at 517 ; see also In re Bear Stearns, 374 B.R. at 129 (“[T]he Guide explains that the presumption does ‘not prevent, in accordance with applicable procedural law, calling for or assessing other evidence if the conclusion suggested by the presumption is called into question by the court or an interested party.’ ”) (quoting Guide ¶ 122) (emphasis in original). Thus, the presumption “does not tie the hands of a court to examine the facts more closely in any instances where the court regards the issues to be sufficiently material to warrant further inquiry.” In re Creative Fin., 543 B.R. at 515 (quoting In re Basis Yield Alpha Fund (Master), 381 B.R. 37, 52 (Bankr. S.D.N.Y. 2008)).
Additionally, the registered office “does not shift the risk of nonpersuasion, i,e,, the burden of proof, away from the foreign representative seeking recognition as a main proceeding.” In re Bear Stearns, 374 B.R. at 127 (quoting In re Tri-Continental Exch. Ltd., 349 B.R. 627, 635 (Bankr. E.D. Cal. 2006)). “[I]f the foreign proceeding is in the country of the registered office, and if there is evidence that the center of main interests might be elsewhere, then the foreign representative must prove that the center of main interest is in the same country as the registered office.” Id. at 128 (quoting In re TriContinental Exch., 349 B.R. at 635 ); see also id. (“[The] presumption is not a preferred alternative where there is a separation between a corporation’s jurisdiction of incorporation and its real seat.”) (citing Jay Lawrence Westbrook, Locating the Eye of the Financial Storm, 32 BROOK. J. INT’L L. 3, 15 (2007)).
B. The Applicable Standard in this Proceeding
Against this backdrop, the Court must determine the applicable legal standard for evaluating the Dutch Petition. The parties offer starkly different views. On the one hand, the Movants urge that the Court consider recognition of the Dutch Bankruptcy Proceeding under Section 1517(a) of the Bankruptcy Code de novo, evaluating the COMI of Coop as of the date that the Insolvency Trustee filed the Dutch Petition, essentially disregarding the Prior Recognition Order. See Mov-ants’ Proposed CoL ¶ 1-4 [ECF No. 120]. While acknowledging that Section 1517(d) grants the authority for “modification or termination” of an earlier recognition order, Movants contend that satisfaction of the standard set in Section 1517(a) mandates withdrawal of the earlier order and issuance of a new recognition. See Mov-ants’ Proposed CoL ¶ 5—13; Dutch Petition 95-99, 105; Trustee Reply ¶ 84-87 [ECF No. 72], On the other hand, the Objectors suggest a higher hurdle. Given the existence of the Court’s Prior Recognition Order, they argue that Section 1517(d) applies to allow for “modification or termination,” but contend that Movants must meet the exacting standard in Rule 60(b) of the Federal Rules of Civil Procedure to vacate the prior order and reach a different result on Coop’s COMI. See, e.g., Objectors’ Proposed FoF and CoL ¶¶ 63-70.
As always, we start with the words of the statute. In re Caldor Corp., 303 F.3d 161 , 167 (2d Cir. 2002) (“The task of resolving a dispute over the meaning of a provision of the Bankruptcy Code ‘begins where all such inquires must begin: with the language of the statute itself.’ ”) (quoting United States v. Ron Pair Enters., 489 U.S. 235, 241 , 109 S.Ct. 1026 , 103 L.Ed.2d 290 (1989)). While the Movants look to Section 1517(a) to lobby for a de novo COMI determination, it is Section 1517(d) that most directly applies to this situation. That section specifically contemplates the question currently before this Court: a request to terminate or modify a prior recognition. See In re SPhinX, 351 B.R. at 116 (noting that “recognition itself is subject to review and modification under Bankruptcy Code section 1517(d).”). It provides that “[t]he provisions of this sub-chapter do not prevent modification or termination of recognition if it is shown that the grounds for granting it were fully or partially lacking or have ceased to exist ....” 11 U.S.C. § 1517 (d). The statute thus breaks down the basis for modification or termination into two prongs. The first prong looks backwards to see whether the basis for recognition previously presented to the Court was flawed in some way. See 11 U.S.C. § 1517 (d) (whether it is shown that the grounds for recognition were “fully or partially lacking”). The second prong looks forwards to whether something has changed since recognition. See id. (whether the grounds for recognition “have ceased to exist”).
Petitioner’s advocacy of a de novo review under Section 1517(a) in this case fails because it reads subsection (d) out of the statute. If the termination or modification of recognition is governed by Section 1517(a), what is the purpose of Section 1517(d)? What would be the point in setting forth the two prongs in subsection (d) if not to provide guidance on the basis for modification or termination of recognition? 12 See Knutzen v. Eben Ezer Lutheran Hous. Ctr., 815 F.2d 1343 , 1348-49 (10th Cir. 1987) (a statute should be construed “so that one section will not destroy another unless the provision is the result of obvious mistake or error.”) (citations omitted)). By ignoring the existence of this language, Movants’ position “is thus at odds with one of the most basic interpretive canons, that ‘[a] statute should be construed so that effect is given to all its provisions, so that no part will be inoperative or superfluous, void or insignificant Corley v. United States, 556 U.S. 303, 314 , 129 S.Ct. 1558 , 173 L.Ed.2d 443 (2009) (quoting Hibbs v. Winn, 542 U.S. 88, 101 , 124 S.Ct. 2276 , 159 L.Ed.2d 172 (2004) (quoting 2A N. Singer, Statutes and Statutory Construction § 46.06, pp. 181—186 (6th ed. rev. 2000)); Clark v. Rameker, - U.S. -, 134 S.Ct. 2242 , 189 L.Ed.2d 157 (2014) (citing Corley, 556 U.S. at 314 , 129 S.Ct. 1558 ). Of course, the so-called “antisuperfluous canon”—like other canons of statutory interpretation—is not absolute. For example, it cannot be used to override the unambiguous language of a statute. See Corley, 556 U.S. at 324-25 , 129 S.Ct. 1558 (Alito, J., dissenting) (“such ‘interpretative canon[s are] not a license for the judiciary to rewrite language enacted by the legislature.’”) (citations omitted). But no violence is done to the language of Chapter 15 by viewing Section 1517(d) as the controlling authority for a request to modify or terminate a prior order of recognition.
This conclusion is reinforced by the placement of subsections (a) and (d) within the same statutory section. It is hard to imagine why Congress would place these two provisions within the same section of Chapter 15 unless it was intended that both subsections be given effect where appropriate. It is not the case that these provisions are separated by time or space within Chapter 15, having both been enacted simultaneously. See Bankruptcy Abuse Prevention and Consumer Protection. Act of 2005, Pub. L. No. 109-8, 119 Stat. 23, 139-140 (Apr. 20, 2005). The applicability of subsection (d) is further confirmed by the one relevant sentence of legislative history, which plainly states that “[subsection (d) ] states the grounds for modifying or terminating recognition.” H.R. Rep. 109-31, pt. 1 (2005); see also Guide, Art. 17, § 4 (noting that the prior articles did “not prevent modification or termination of recognition if it is shown that the grounds for granting it were fully or partially lacking' or have ceased to exist”).
But while the language of Section 1517(d) contemplates the Court’s ability to alter a prior recognition determination if one of the two prongs is satisfied, nothing in Section 1517(d) requires it. Section 1517(d) instead contains much more open-ended language. It provides that "[t]he provisions of subchapter [1617] do not prevent [the Court] from modifying] or terminating]” a prior recognition order. 11 U.S.C. § 1517 (d). The use of such permissive phrasing suggests that the Court is left with discretion. See Rastelli v. Warden, Metro. Correctional Center, 782 F.2d 17, 23 (2d Cir. 1986); (“The use of a permissive verb—‘may review’ instead of ‘shall review'—suggests a discretionary rather than mandatory review process.”); In re New Haven Projects Ltd. Liab. Co., 225 F.3d 283, 287 (2d Cir. 2000) (“This Court has observed that ‘[t]he verb “may” generally denotes a grant of authority that is merely permissive.’ ”) (quoting International Cablevision, Inc. v. Sykes, 997 F.2d 998, 1005 (2d Cir.1993)); see also Jama v. Immigration and Customs Enforcement, 543 U.S. 335, 346 , 125 S.Ct. 694 , 160 L.Ed.2d 708 (2005) (the connotation that “may” implies discretion is particularly apt when it is used in contrast to the word “shall”).
The discretion left to a court under Section 1517(d) is markedly different from other provisions governing recognition under Chapter 15. Of particular relevance here, the provision relied upon by the Movants—Section 1517(a)—speaks in mandatory terms. It provides that “an order recognizing a foreign proceeding shall be entered” if the conditions for recognition are met. 11 U.S.C. § 1517 (a) (emphasis added). Section 1515 of the Bankruptcy Code also uses mandatory language when specifying the information that must be included in a petition for recognition. See 11 U.S.C. § 1515 (b) (“A petition for recognition shall be accompanied by ....”) (emphasis added). When used in a statute, the word “shall” is ordinarily the language of a legislative command. See Alabama v. Bozeman, 533 U.S. 146, 153 , 121 S.Ct. 2079 , 150 L.Ed.2d 188 (2001) (concluding that the absolutist language of a statute precluded the state’s argument for an exception); Escondido Mut. Water Co. v. La Jolla Indians, 466 U.S. 765 , 104 S.Ct. 2105 , 80 L.Ed.2d 753 (1984) (“Congress’ apparent desire that the Secretary’s conditions ‘shall’ be included in the license must therefore be given effect unless there are clear expressions of legislative intent to the contrary.”); Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 35 , 118 S.Ct. 956 , 140 L.Ed.2d 62 (1998) (“The mandatory ‘shall’ ... normally creates an obligation impervious to judicial discretion.”); see also In re Suffolk Regional Off-Track Betting Corp., 542 B.R. 72, 84-85 (Bankr. E.D.N.Y. 2015) (“The use of the mandatory ‘shall’ language denotes a ministerial duty imposed by statute ....”)
The lack of mandatory language in Section 1517(d)—coupled with' the use of “shall” elsewhere in Chapter 15—demon-strates that this distinction is deliberate and, therefore, such discretion was intended for Section 1517(d). See Weinstein v. Albright, 261 F.3d 127, 137-38 (2d Cir. 2001) (when a statute uses both “may” and “shall,” the normal inference is that each is used in its usual sense, the one being permissive and the other mandatory); Lopez v. Davis, 531 U.S. 230, 241 , 121 S.Ct. 714 , 148 L.Ed.2d 635 (2001) (“Congress’ use of the permissive ‘may* ,.. contrasts with the legislators’ use of a mandatory ‘shall’ in the very same section.”); United States ex rel. Siegel v. Thoman, 156 U.S. 353, 359 , 15 S.Ct. 378 , 39 L.Ed. 450 (1895) (“In the law to be construed here it is evident that the word ‘may' is used in special contradistinction to the word ‘shall ....’”); cf. Gustafson v. Alloyd Co., 513 U.S. 561, 570-71 , 115 S.Ct. 1061 , 131 L.Ed.2d 1 (1995) (an act of Congress “should not be read as a series of unrelated and isolated provisions.”) (internal quotations omitted).
Of course, the case law on the distinction between mandatory and permissive language in statutes focuses largely on the difference between the terms “shall” and “may.” This is not surprising given the frequency with which these terms are used in American statutes and given that these terms have well-established meaning in American jurisprudence. The Court is mindful that Section 1517(d) does not use the term “may,” despite the fact that “may” is used elsewhere in Chapter 15. See, e.g., 11 U.S.C. §§ 1505 , 1507(a), 1509(b), 1511(a). But Congress does not follow a uniform code to guide its statutory construction (see Robert A. Katzmann, Judging Statutes 51-53 (2014)), and there are many possible variants of a permissive phrase. See, e.g., Leland v. Moran, 235 F.Supp.2d 153, 169 (N.D.N.Y. 2002), aff'd, 80 Fed.Appx. 133 (2d Cir. 2003) (holding that a statute providing that a “commissioner shall have the power to” take certain actions to abate pollution “does not constrain the [commission’s] discretion whether to enforce or prosecute violations ... but merely provides the [commission] with a grant of authority.”); see id at 163-164 (holding that where a building inspector “is authorized” to take action under a statute, he has “discretion” to determine “whether and how to enforce the provisions at issue .... ”).
The lack of case law on the exact phrasing of subsection (d) does not justify disregarding its obvious discretionary meaning. See In re Stringer, 847 F.2d 549 , 551 n.2 (9th Cir. 1988) (“We note in passing that lack of caselaw supporting the literal construction of a statute is not usually a reason to ignore its plain meaning. Moreover, lack of interpretive caselaw may well mean that other courts and litigants have not doubted the plain meaning of the statute.”); Am. Nat'l Red Cross v. S.G., 505 U.S. 247, 263 , 112 S.Ct. 2465 , 120 L.Ed.2d 201 (1992) (rejecting alternative interpretative theories of a statute that “violate[ ] the ordinary sense of the language used.”); Caminetti v. U.S., 242 U.S. 470, 485 , 37 S.Ct. 192 , 61 L.Ed. 442 (1917) (“[I]f [the statutory language] is plain, ... the sole function of the courts is to enforce it according to its terms.”); In re Caldor Corp., 303 F.3d at 167-68 C“[A]s long as the statutory scheme is coherent and consistent, there generally is no need for a court to inquire beyond the plain language of the statute.’ ”) (quoting Ron Pair Enters., 489 U.S. at 240-241 , 109 S.Ct. 1026 ). 13
It is nonetheless instructive to review a few similarly phrased provisions in the Bankruptcy Code to see how such language is used.. See Nat'l Credit Union Admin. v. First Nat. Bank & Tr. Co., 522 U.S. 479, 501 , 118 S.Ct. 927 , 140 L.Ed.2d 1 (1998) (it is an “established canon of construction that similar language within the same statutory section must be accorded a consistent meaning”); Ratzlaf v. United States, 510 U.S. 135, 143 , 114 S.Ct. 655 , 126 L.Ed.2d 615 (1994) (“A term appearing in several places in a statutory text is generally read the same way each time it appears.”); Anderson v. Fed. Deposit Ins. Corp., 918 F.2d 1139 , 1143 n.4 (4th Cir. 1990) (“We believe the more appropriate rule of statutory construction is the principle that a court should, if possible, construe statutes harmoniously.”); In re Betacom of Phoenix, Inc., 225 B.R. 703, 707 (D. Ariz. 1998), rev’d on other grounds, 240 F.3d 823 (9th Cir. 2001) (“Congressional intent may be clarified by analogizing to similar language in an unrelated statute, that applies to similar parties, subject matter or relationships”). A review of these similar instances demonstrates a consistent use of the “nothing prevents” formulation for situations where discretion may be exercised consistent with certain conditions, but where no action is mandated.
Starting closest to home, such phrasing is used in one other provision of Chapter 15. Section 1506 provides that “[n]othing in this chapter prevents the court from refusing to take an action governed by this chapter if the action would be manifestly contrary to the public policy of the United States.” 11 U.S.C. § 1506 . The case law on Section 1506 has focused on the significance of the phrase “manifestly contrary.” See In re Fairfield Sentry, 714 F.3d at 139 (observing that the section “does not create an exception for any action under [Cjhapter 15 that may conflict with public policy, but only an action that is manifestly contrary.”); In re Vitro, 701 F.3d at 1069-70 (taking restrictive reading of Section 1506 to cover only “exceptional circumstances”). But more relevant for our purposes, the section is considered to be a discretionary exception, consistent with the section’s use.of the same kind of open ended approach employed by Section 1517(d). See In re Creative Fin., 543 B.R. at 515 (characterizing Section 1506 as “permitting] a court to refuse recognition” on specified grounds).
This same kind of phrasing is also found in the most commonly cited source of bankruptcy court discretion, Section 105(a). That provision reads as follows:
The court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. No provision of this title providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of process.
11 U.S.C. § 105 (a) (emphasis added). Rather than being read as a directive, Section 105(a) is understood as providing courts with discretion to accommodate the unique facts of a case consistent with the policies or directives set by the other applicable substantive provisions of the Bankruptcy Code. See Sears, Roebuck & Co. v. Spivey, 265 B.R. 357, 371 (E.D.N.Y. 2001) (“Section 105 of the Bankruptcy Code bestows on bankruptcy courts a specific equitable power to act in accordance with principles of justice and fairness.”); cf. In re Tennant, 318 B.R. 860, 871 (9th Cir. BAP 2004) (approving a bankruptcy court’s sua sponte dismissal of a case under Section 105(a) after the debtor failed to file its Statement of Financial Affairs within the 15 days required by Rule 1007(c)); In re Durham, 461 B.R. 139, 141 (Bankr. D. Mass. 2011) (noting that Section 109(g)(2) on Chapter 13 debtor eligibility ‘“does not explicitly prescribe for [sic] sua sponte dismissal or conversion,’ [but Section] 105(a) ‘accommodates such a result.’ ”) (quoting In re Kazis, 256 B.R. 242, 244 (Bankr. D. Mass. 2000)).
Like Section 1517(d), Section 105(a) only contemplates exercise of the granted discretion when appropriate. Under Section 105(a), the standard for appropriate action is whether the exercise of discretion would contravene another section of the Bankruptcy Code. See In re Headlee Mgmt. Corp., 519 B.R. 452, 459 (Bankr. S.D.N.Y. 2014) (Section 105(a) cannot be used to “override explicit mandates of other sections of the Bankruptcy Code.”) (citing Law v. Siegel, - U.S. -, 134 S.Ct. 1188, 1193 , 188 L.Ed.2d 146 (2014)); GAF Corp. v. Johns-Manville Corp. (In re Johns-Manville Corp.), 26 B.R. 405, 415 (Bankr. S.D.N.Y. 1983) (Section 105 “does not permit the court to ignore, supersede, suspend or even misconstrue the statute itself or the rules.”) (citing 2 Collier on Bankruptcy ¶ 105.02 (15th ed. 1982)). Thus, Section 105(a) is markedly similar to Section 1517(d), which cabins off a court’s discretion for modifying or terminating recognition to instances where one of the two prongs set forth in the subsection have been met.
Another provision of the Bankruptcy Code—Section 524(f)—also employs the same kind of negative formulation to preserve discretion, but this time for a debtor rather than a court. Sections 524(c) and (d) govern the specific conditions that permit debtor-creditor repayment agreements (e.g. reaffirmation agreements) involving dischargeable debts. See 11 U.S.C. §§ 524 (c)-(d). Section 524(f) states that “[n]othing contained in subsection (c) or (d) of this section prevents a debtor from voluntarily repaying any debt.” 11 U.S.C. § 524 (f). This exception preserves a debt- or’s freedom to make payments on a dis-chargeable debt if the debtor determines such a choice is warranted. See In re Journal Register Co., 407 B.R. 520, 533 (Bankr. S.D.N.Y. 2009). Once again, the language does not mandate action but rather preserves the right to act where appropriate. In the case of Section 524(f), the standard for what is appropriate is a truly voluntary election by the debtor, a condition which courts have construed strictly, consistent with the broader goals of debtor protection manifested in the surrounding provisions. See In re Nassoko, 405 B.R. 515, 523-24 (Bankr. S.D.N.Y. 2009); In re Cruz, 254 B.R. 801, 815-16 (Bankr. S.D.N.Y. 2000).
Last but not least, the Court has surveyed instances of similar negative phrasing elsewhere in the U.S. Code. There are well over 100 instances using the language “does not prevent,” let alone other formulations. They are far too numerous and disparate to be summarized here. But importantly, the Court has been unable to find any instances where such phrasing appears to have been used to mandate action. Like 1517(d), these statutes refer back to strictures of a statutory scheme and illuminate instances where, within that scheme, discretion may be exercised under appropriate circumstances. See, e.g., 31 U.S.C. § 5318 (“(1) In general.—A financial institution ... shall not establish, maintain, administer, or manage a correspondent account in the United States for, or on behalf of, a foreign bank that does not have a physical presence in any country. (2) Prevention of indirect service to foreign shell banks. ... (3) Exception.— Paragraphs (1) and (2) do not prohibit a covered financial institution from providing a correspondent account to a foreign bank, if the foreign bank—....”) (emphasis added); 10 U.S.C. § 2204 (“To prevent overdrafts and deficiencies in the fiscal year for which appropriations are made, appropriations made to the Department of Defense or to a military department, and reimbursements thereto, are available for obligation and expenditure only under scheduled rates of obligation, or changes thereto, that have been approved by the Secretary of Defense. This section does not prohibit the Department of Defense from incurring a deficiency that it has been authorized by law to incur.”) (emphasis added). 14
Consistent with this statutory analysis, the only court to have applied Section 1517(d) has concluded that relief under this provision is discretionary. See In re Loy, 448 B.R. 420, 438 (Bankr. E.D. Va. 2011) (stating that “revisiting a recognition determination is not mandatory, it is within the Court’s discretion to do so"). In Loy, the debtor sought to revoke the bankruptcy court’s prior recognition of an English bankruptcy proceeding as a foreign main proceeding. The crux of the dispute in Loy was the debtor’s contention that COMI was erroneously found to exist in England when, in fact, the debtor resided in the United States. Despite extensive efforts to get to the bottom of this factual question, the court was unable to obtain a clear factual record due to the debtor’s lack of cooperation. Given this difficulty, the court in Loy denied the debtor’s request, stating that “[t]he Court will not afford the Debtor the extraordinary remedy of revocation of recognition without a complete factual record.” Id. at 436 . In reaching that decision, the court applied the “plain meaning rule” to Section 1517(d). Id. at 438 . It concluded that “[t]he actual language dictates that the subchapter’s provisions ‘do not prevent modification or termination’ ” to mean that “revisiting a recognition determination is not mandatory” but rather “within the Court’s discretion.” Id. at 438 (emphasis in the original) (quoting 11 U.S.C. § 1517 (d)).
For many of the same reasons set forth above, the Court also rejects the Objectors’ contention that Rule 60(b) of the Federal Rules of Civil Procedure governs the request for relief in this case. The Objectors contend that Section 1517(d) does not provide a standard for obtaining relief from recognition and, therefore, such relief should be governed'by the procedural rules that would normally apply where a party seeks to vacate a court order. This means, they say, that we should use Rule 60(b) here. But the Court disagrees. It is true that Rule 60(b) is the procedural rule that normally governs a request for relief from an order, 15 Fed. R. Civ. P. 60(b) (basis for relief includes mistake, inadvertence, surprise, excusable neglect, newly discovered evidence and fraud); see United States v. Int’l Bd. of Teamsters, 247 F.3d 370, 391 (2d Cir. 2001) (relief under Rule 60(b) is “properly granted only upon a showing of exceptional circumstances.”). But it is not true that no standard exists in Chapter 15 for the situation before the Court. As explained above, subsection (d) provides the standard for a request to terminate or modify recognition—a discretionary standard that examines where there was a mistake in the initial grant of recognition or has been a subsequent change in circumstances. As such, there is no need for Rule 60(b) to fill a gap in the statutory standard.
Moreover, the stringent requirements of Rule 60(b) are a poor fit here. As numerous courts have recognized, the recognition process must be sufficiently flexible to achieve the goals of Chapter 15. In In re Oversight & Control Comm’n of Avanzit, S.A., 385 B.R. 525 (Bankr. S.D.N.Y. 2008), for example, the court observed that “Chapter 15 recognizes that the status of the foreign proceeding can change, and the change can affect the right to recognition before or after it is granted.” Id. at 533 ; see In re Loy, 448 B.R. at 440 (citing the Avanzit case for the idea that “recognition determinations are malleable, and, as facts warrant in a specific case, the court may revisit recognition.”). In the same vein, the court in In re British Am. Ins. Co., 425 B.R. 884 (Bankr. D. Fla. 2010), allowed facts relating to the debtor’s COMI to be admitted after the recognition proceedings had commenced. The court observed that Section 1517(d) allowed courts to adjust their rulings based on changed circumstances, which exhibited “a policy that the recognition process remain flexible, taking into account the actual facts relevant to the court’s decision rather than setting an arbitrary determination point.” Id. at 910 ; see In re SPhinX, 351 B.R. at 112 (noting that Chapter 15 maintains, and in some respects enhances, the “maximum flexibility” of bankruptcy courts in handling ancillary cases in light of principles of international comity and respect for the laws and judgments of other nations). Indeed, courts have gone so far as to view a recognition order as less than a final order, seeing it as a reflection of the facts presented to the court at the time. See In re Ernst & Young, Inc., 383 B.R. 773, 781 (Bankr. D. Colo. 2008) (court concluding that its recognition ruling was a summary determination rather a decision that was “full and final”).
C. Judicial Estoppel Does Not Apply to these Proceedings
Before assessing the Dutch Petition under Section 1517(d), the Court must first address Movants’ claims that such an analysis is unnecessary because of the doctrine of judicial estoppel. More specifically, the Movants contend that Coop is barred by judicial estoppel from arguing in this proceeding that its COMI is in Brazil because of prior representations by Coop to the Dutch courts. Importantly, Movants do not claim that Coop ever explicitly or affirmatively represented to the Dutch courts that its COMI was in a particular location. See Trustee Reply ¶ 32 (“Coop’s behavior ... presents a classic case' for judicial estop-pel”) (emphasis added); id. ¶ 34 (acknowledging that the Objectors are correct in “not[ing] that Coop’s petition never uses the term COMI”). But the Movants- nonetheless argue that estoppel should apply because the information provided by Coop resulted in the Dutch courts finding that Coop’s COMI under the EU Regulation is in the Netherlands and Coop never contested that finding.
“The doctrine of judicial estop-pel prevents a party from asserting a factual position in one legal proceeding that is contrary to a position that is successfully advanced in another proceeding.” BPP Illinois, LLC v. Royal Bank of Scotland Grp. PLC, 859 F.3d 188, 192 (2d Cir. 2017) (quoting Rodal v. Anesthesia Grp. of Onondaga, P.C., 369 F.3d 113, 118 (2d Cir. 2004)). Judicial estoppel aims “to protect the integrity of the judicial process ... by prohibiting parties from deliberately changing positions according to the exigencies of the moment.” New Hampshire v. Maine, 532 U.S. 742, 749-50 , 121 S.Ct. 1808 , 149 L.Ed.2d 968 (2001) (quotations omitted). “[T]he exact criteria for invoking judicial estoppel will vary based on specific factual contexts.” BPP Illinois, 859 F.3d at 192 (quoting Adelphia Recovery Trust v. Goldman, Sachs & Co., 748 F.3d 110, 116 (2d Cir. 2014)). But judicial estoppel generally requires that “[A] a party’s later position is ‘clearly inconsistent’ with its earlier* position; [B] the party’s former position has been adopted in some way by the court in the earlier proceeding; and [C] the party asserting the two positions would derive an unfair advantage against the party seeking estoppel.” Id. at 192 . (quoting In re Adelphia Recovery Tr., 634 F.3d 678, 695-96 (2d Cir. 2011)). The third requirement is sometimes couched in terms of “ ‘unfair detriment [to] the opposing party’ rather than advantage to the party to be estopped.” In re Adelphia Recovery Tr., 634 F.3d at 696 (quoting New Hampshire, 532 U.S. at 751 , 121 S.Ct. 1808 ) (alteration in original). But the Second Circuit limits application of judicial estoppel to “situations where the risk of inconsistent results with its impact on judicial integrity is certain.” Id. “This requirement means that judicial estoppel may only apply where the earlier tribunal accepted the accuracy of the litigant’s statements.” Id. (citing DeRosa v. Nat’l Envelope Corp., 595 F.3d 99, 103 (2d Cir. 2010)).
Under applicable law, silence in a prior proceeding is generally not treated as comparable to a statement for purposes of judicial estoppel. Classic applications of the doctrine involve affirmative declarations or postures that are directly at odds with a latter position. In New Hampshire, for example, the state of New Hampshire was estopped from contesting the location of its shared boundary with Maine only after previously entering a consent decree “expressly” determining the issue. New Hampshire, 532 U.S. at 746 , 121 S.Ct. 1808 . Similarly, a shipping company in Rapture Shipping was estopped from denying the existence of a contract it had explicitly relied upon in earlier proceedings in front of a Dutch court. See Rapture Shipping, Ltd. v. Allround Fuel Trading B.V., 350 F.Supp.2d 369 (S.D.N.Y. 2004). Alternatively, the court in AXA Marine & Aviation Ins. rejected a judicial estoppel argument where an insurer’s denial of coverage did not actually contradict an earlier statement in a related proceeding that coverage had not been declined “to date.” AXA Marine & Aviation Ins. (UK) Ltd. v. Seajet Indus. Inc., 84 F.3d 622 , 628 (2d Cir. 1996).
Instead, silence in a prior proceeding provides a basis for judicial estop-pel where it violates some affirmative duty to speak. Perhaps the most common example in bankruptcy court involves a debtor’s failure to declare the existence of assets or potential assets. Such cases of judicial es-toppel rest on the debtor’s legal obligation to completely and accurately inform the court of its assets, and the damage caused to the bankruptcy system and individual creditors by a failure to do so. See, e.g., BPP Illinois, 859 F.3d at 192-194 (examining a debtor’s duty to list all assets prior to confirmation of a plan and finding the debtor had violated the duty by not revealing a fraud claim it subsequently pursued); In re Adelphia Recovery Tr., 634 F.3d at 697-98 (finding that a statutory trust created to pursue claims on behalf of certain estate claimants had taken inconsistent positions by failing to reveal to the court and certain creditors the existence of potential fraudulent conveyance claims); Galin v. United States, 2008 WL 5378387 , at *10-11 (E.D.N.Y. Dec. 23, 2008) (holding divorcee judicially estopped in tax case from claiming equitable title to property after having asserted that she had no interest in any real property during an earlier pre-divorce personal bankruptcy).
Where such legal disclosure obligations are not violated, judicial estoppel based on a failure to act arises where the omission flaunts a party’s fundamental procedural obligations so as to actively mislead a court. In Guinness PLC v. Ward, 955 F.2d 875, 898-900 (4th Cir. 1992), for example, Ward was estopped in a proceeding seeking enforcement of a foreign money judgment from raising the argument that the proceeding violated a pri- or settlement between the parties. The court observed that Ward had continued with his appeal of the underlying foreign action after the purported settlement without informing the British appellate courts of the settlement, thereby “inherently and explicitly informing [the British appellate courts] that no events had occurred which would render such appeals improper.” Id. at 899 , Thus, it was inappropriate to rely on the settlement in the U.S. court while Ward himself had acted inconsistently in the British proceedings. Id. at 899-900 .
But courts generally have refused to apply judicial estoppel to silence where a party is not otherwise obligated to speak up or take action. For example, in Bridgeway Corp. v. Citibank, 45 F.Supp.2d 276, 283-84 (S.D.N.Y. 1999), aff'd, 201 F.3d 134 (2d Cir. 2000), Citibank was not judicially estopped from arguing that a Liberian court judgment was unenforceable due to impartiality of the Liberian judicial system. The court held that such a stance was not “clearly inconsistent” with participating in and defending itself against suits in the Liberian courts without making such arguments there, which plaintiff insisted “implicitly” embraced the opposite position. Id. The court was not swayed by plaintiffs argument that Citibank had not made such claims until it was faced with an unfavorable decision in Liberia. Id.; see also Esparza v. Stephens, 2017 WL 1197137 , at *5 (E.D. Tex. Mar. 31, 2017) (judicial estoppel did not bar Texas from opposing a habeas petition after not submitting written materials earlier in the proceeding where it was not required to do so under the applicable rules); Nettles v. Daphne Utilities, 2014 WL 3845072 , at *3 n.2 (S.D. Ala. Aug. 5, 2014) (judicial estop-pel did not bar a party from objecting to a jury demand despite not addressing the issue in an earlier responsive pleading when the rules did not require that the objection be raised earlier and the objection was not inconsistent with later pleadings).
In the present case, Movants’ es-toppel argument seeks to bar Coop from asserting a position on COMI under Chapter 15 based upon (1) the jurisdictional statements made by Coop in its Dutch SoP Petition; and (2) Coop’s failure to legally contest or appeal any of the Dutch courts’ findings regarding Coop’s COMI. Movants’ Proposed CoL ¶¶ 81-83, But Movants’ es-toppel argument fails because the COMI finding under the EU Regulation in the Dutch proceedings is not the same as a COMI finding under Chapter 15 of the Bankruptcy Code.
It is true that Chapter 15’s use of the COMI concept stems indirectly from the EU Regulation. The Guide explains that the use of COMI “as the determinant that a foreign proceeding is a ‘main’ proceeding was modeled on the use of that concept in the European Union Convention on Insolvency Proceedings ... that was already in the process of being adopted when UNCI-TRAL drafted the Model Law.” In re Bear Stearns, 374 B.R. at 129 (citing Guide, U.N. Gen. Ass., UNCITRAL 30th Sess., U.N. Doc. A/CN.9/442 (1997)). Consequently, “Congress instructed that ‘[i]n interpreting [Chapter 15], the court shall consider its international origin, and the need to promote an application of this chapter that is consistent with the application of similar statutes adopted by foreign jurisdictions.’ ” In re Fairfield Sentry, 714 F.3d at 136 (quoting 11 U.S.C. § 1508 ) (alterations in the original); see also In re Ocean Rig UDW Inc., 570 B.R. 687 , 703 n.6 (Bankr. S.D.N.Y. 2017).
As a result of their related histories, Chapter 15 and the EU Regulation share many significant traits, especially with respect to the concept of COMI. Both regimes require COMI inquiries for each debtor entity rather than for collective corporate groups. See Case 341/04, Bondi v. Bank of America, N.A. (Eurofood), 2006 E.C.R. I-3813, p. 18-19, ¶ 30, 2006 WL 1142304 (E.C.J. May 2, 2006) (“[E]ach debtor constituting a distinct legal entity is subject to its own court jurisdiction.”); Veder Decl. ¶ 32 (“[A] court [in the EU] faced with a corporate group insolvency needs to ascertain the COMI individually for each legal entity”); 11 U.S.C. § 1502 (1) C“[D]ebtor’ means an entity that is the subject of a foreign proceeding.”). Both regimes include an initial presumption that a legal entity’s COMI is the location of the debtor’s registered seat or office. See Veder Decl. ¶ 20 (citing 3(1) Insolvency Regulation (recast)); 11 U.S.C. § 1516 (c). U.S. and European courts have also emphasized the principle that COMI should be established by “objective factors” which are “ascertainable by third parties.” Veder Decl. ¶ 30 (citation omitted); see In re Fairfield Sentry, 714 F.3d at 136 (“The focus on regularity and ascertainability should also inform our interpretation of the text.”).
Despite all these similarities, however, the EU Regulation and Chapter 15 are far from identical. As the Second Circuit has flatly stated, “the EU Regulation does not operate as an analog to Chapter 15.” In re Fairfield Sentry, 714 F.3d at 136 . The COMI inquiries underpinning both regimes are conceptually and procedurally different, and have evolved under separate lines of case law written by judges operating with different purposes and concerns.
First and foremost, the EU Regulation is not an implementation of the UNCI-TRAL Model Law. 16 The EU Regulation’s principal concern is coordination and recognition between insolvency proceedings among the European member states. Trial Tr. 487:13-488:8, Sept. 19, 2017 (Veder). Because of this focus on coordinating insolvency proceedings within the EU, “a main insolvency proceeding in one EU member state is automatically recognized by all other EU member states.” In re Fairfield Sentry, 714 F.3d at 136 (citing EU Regulation art. 16). Once a COMI determination is made in one state, it is binding on other EU member state courts. See Trial Tr. 478:23-479:13, Sept. 19, 2017 (Veder); Berkenbosch Decl. ¶ 126. Consequently, “the EU has no need for a recognition petition such as provided under Chapter 15.” In re Fairfield Sentry, 714 F.3d at 136 . When a court finds a debtor’s COMI to be outside the EU, it looks to the applicable national insolvency regime rather than the EU Regulation. See Berkenbosch Decl. ¶ 115-17; Veder Decl. ¶ 12-15, 33-35. In the Netherlands, it is the DBA that dictates the specific procedures and forms of relief available to a debtor in the Dutch courts and governs how to treat insolvency proceedings for a debtor with a Dutch “establishment” but a non-EU COMI. See Berkenbosch Decl. ¶ 115-17; Veder Decl. ¶ 12-15, 33-35.
The EU Regulation is also a “poor analog” in regards to the timeframe considered in a COMI analysis. In re Fairfield Sentry, 714 F.3d at 136 n.9 (discussing In re Millennium Global Emerging Credit Master Fund Ltd., 458 B.R. 63, 74 (Bankr. S.D.N.Y. 2011)). The EU Regulation looks to the date of the filing of the foreign insolvency proceedings (Veder Decl. ¶ 31), whereas in the U.S. the inquiry centers on the date of the Chapter 15 recognition petition. See In re Fairfield Sentry, 714 F.3d at 136 .
While both regimes include a registered office presumption, divergent case law has led to a different application of that presumption under the EU Regulation than under Chapter 15. The European Court of Justice set the standard for applying and overcoming the presumption in the Euro-food and Interedil 17 cases. See Movants’ Proposed CoL ¶ 50; Veder Decl. ¶¶ 22-31. Under the^e eases, the EU courts do not pursue a comprehensive exploration of the evidence, but rather uphold the presumption unless it is demonstrated that a debt- or’s management and assets sit together in a different state, and that such facts are ascertainable by third parties:
Where a company’s central administration is not in the same place as its registered office, the presence of company assets and the existence of contracts for the financial exploitation of those assets in a Member State other than that in which the registered office is situated cannot be regarded as sufficient factors to rebut the presumption unless a comprehensive assessment of all the relevant factors makes it possible to establish, in a manner that is ascertainable by third parties, that the company’s actual centre of management and supervision and of the management of its interests is located in that other Member State.
Veder Decl. ¶ 30 (quoting Interedil ¶ 59).
This is far different than U.S. law. In the U.S., the registered office presumption is applied merely “[f]or speed and convenience in instances in which the COMI is obvious and undisputed.” In re Creative Fin., 543 B.R. at 514-15 ; see also In re SPhinX, 351 B.R. at 117 (citing legislative history). The presumption “does not shift the risk of nonpersuasion, i.e., the burden of proof, away from the foreign representative seeking recognition as a main proceeding.” In re Bear Stearns, 374 B.R. at 127 (quoting In re Tri-Continental Exch., 349 B.R. at 635 ). “In fact, Congress changed the relevant language of the Model law by substituting ,,. ‘evidence’ ,.. for the Model Law’s ‘proof ... to clarify this issue.” In re Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., 389 B.R. 325, 335 (S.D.N.Y. 2008). “[T]he Guide explains that the presumption does ‘not prevent, in accordance with applicable procedural law, calling for or assessing other evidence if the conclusion suggested by the presumption is called into question by the court or an interested party.’ ” In re Bear Stearns, 374 B.R. at 129 (emphasis in original) (quoting Guide, ¶ 122). Thus, the presumption “does not tie the hands of a court to examine the facts more closely in any instances where the court regards the issues to be sufficiently material to warrant further inquiry.” In re Creative Fin., 543 B.R. at 515 (quoting In re Basis Yield, 381 B.R. at 52 ). The presumption “is especially inappropriate in a case where there is a substantial dispute.” In re Creative Fin., 543 B.R. at 517 .
In sum, “whatever may be the proper interpretation of the EU Regulation, the Model Law and Chapter 15 give limited weight to the presumption of jurisdiction of incorporation as the COMI.” In re Bear Stearns, 374 B.R. at 128 (quoting West-brook, Locating the Eye of the Financial Storm, 32 BROOK. J. INT’L L. at 15-16). “[I]f the foreign proceeding is in the country of the registered office, and if there is evidence that the center of main interests might be elsewhere, then the foreign representative must prove that the center of main interest is in the same country as the registered office.” In re Bear Stearns, 374 B.R. at 128 (quoting In re Tri-Continental Exch., 349 B.R. at 635 ); see also id, (“[The] presumption is not a preferred alternative where there is a separation between a corporation’s jurisdiction of incorporation and its real seat.”) (citing Westbrook, Locating the Eye of the Financial Storm, 32 BROOK. J. INT’L L. at 15).
The distinctions in the substantive use of the presumption are reflected in the procedures used by Dutch and U.S. courts. The Dutch court’s procedures for issuing a determination on European COMI are very different from what occurs in a Chapter 15 recognition proceeding. In the Netherlands, the DBA requires a COMI finding as the preliminary jurisdictional step in an insolvency proceeding, which can be initiated by a debtor’s ex parte filing of a suspension of payments petition. See Trial Tr. 802:7-15, Sept. 25, 2017 (Berkenbosch). The Dutch courts do not sua sponte seek further information beyond what is provid-
ed in the petition (Berkenboseh Decl. ¶ 119), which can result in an extremely rapid COMI determination. This case is a perfect example. Coop filed its SoP Petition on August 9, 2016 and received confirmation of its provisional SoP at 9:30AM that same morning. See Trial Tr. 801:19-802:6 Sept. 25, 2017 (Berkenboseh). That confirmation found Coop’s COMI to be in the Netherlands under the EU Regulation. TX 28 at 3-4 (“[T]his district court is competent to open these main proceedings as in its opinion the centre of the debtor’s main interests lies in the Netherlands .... The district court: —grants [Coop] a provisional suspension of payments.”). This procedure is a far cry from the U.S. requirement to hold a hearing on recognition—on notice of not less than 21 days— at which time the court will hear any objections. See Fed. R. Bankr. P. 2002(q)(1). This can be an involved and contested process in the U.S. See, e.g., In re Bear Stearns, 389 B.R. 325 (denying appeal of Chapter 15 recognition of Cayman Islands proceeding upon objections from foreign secured creditors and a COMI hearing, despite appellant’s registered office in the Cayman Islands implicating the statutory COMI presumption); In re Millennium Glob. Emerging Credit Master Fund, 458 B.R. 63 , aff'd, 474 B.R. 88 (S.D.N.Y. 2012) (affirming bankruptcy court’s COMI finding and recognition of Bermuda proceedings as foreign main proceeding under Chapter 15); In re Gerova Fin. Grp., Ltd., 482 B.R. 86 (Bankr. S.D.N.Y. 2012) (despite secured creditors’ argument under Section 1506 and opposition to wind-up proceedings, the court granted recognition of Bermuda proceedings as foreign main proceedings under Chapter 15 after one day hearing). Given the different legal standard and process for determining COMI under the EU Regulation and Chapter 15, it is inappropriate to apply judicial estoppel in these proceedings. See Brown v. Watters, 599 F.3d 602, 615 (7th Cir. 2010) (noting that party does not take inconsistent positions when statutory standards relied upon are different in material respects).
In addition, each of the two factual bases relied upon by Movants suffers from other defects. The first argument relies on Coop’s SoP Petition. The Movants argue that the “Jurisdiction” section of the SoP Petition shows that Coop presented facts to the Dutch District Court that would necessarily lead it to conclude that Coop’s COMI was located in the Netherlands. See TX 26 ¶ 8.1. More specifically, the Insolvency Trustee asserts that when a debtor’s COMI is in the EU, it has a statutory duty to “submit sufficient information to enable the judge to determine whether it has jurisdiction under the [EU Regulation] Regime,” Berkenboseh Decl. ¶ 119. Movants contend that Coop provided no information in that section that could rebut the presumption that the location of a company’s registered office is the same as its COMI, and, in fact, further buttressed that conclusion with additional details about Coop’s Dutch presence. Trustee Reply ¶ 33; see also Berkenboseh Decl. ¶ 119. In addition to the “Jurisdiction” section, Movants also cite to a statement concerning Coop’s purpose for filing the SoP Petition:
In order to ensure that the restructuring of the indebtedness as contemplated by the RJ Plan, to the extent it concerns [Coop], will be recognised and bind creditors in relation to the assets and liabilities of [Coop] in the Netherlands (and in other European member states), [Coop] has submitted, together with this petition, a draft composition plan.
TX 26 ¶ 6.1. Because recognition of a Dutch composition plan would only occur automatically across EU member states under the EU Regulation, the Movants argue this statement conclusively demonstrates Coop’s awareness that its SoP Petition would lead to a finding of Dutch COMI. See Trustee Reply ¶ 38.
But Movants have not established that Coop had an affirmative duty to provide more information than is contained in the SoP Petition or that its silence flaunted some fundamental procedural obligations so as to actively mislead a court. Movants’ position is undercut by the breadth of information contained in Coop’s SoP Petition. Coop did not make any representations about its COMI but it did present the relevant facts about its operations. Those facts included not only information about Coop’s registered office in the Netherlands but also information about Coop’s role as a financing SPV for the Oi Group. For example, the SoP Petition highlighted Coop’s role as a “financing vehicle” 18 dependent on the Oi Group operations for repayment of Coop’s debts, 19 described the Brazilian RJ Proceeding and the recognition granted to those proceedings both in the U.S. and the U.K., 20 and repeatedly emphasized that a Coop restructuring and payment of Coop debts was entirely reliant on a successful Brazilian restructuring of the Oi Group as a whole. 21 It is these same facts that led to this Court’s prior order recognizing Coop’s COMI in Brazil, notwithstanding the location of its registered office. See Prior Recognition Order at 2-5; Hr. Tr. 20:17-21:15, July 22, 2017. Thus, it cannot be said that the Dutch courts were misled by Coop given its fulsome disclosure of the relevant facts about its corporate existence and operations. See Period Homes, Ltd. v. Wallick, 275 Ga. 486, 488 , 569 S.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/8501138. Public record. Not legal advice.