MARY KAY VYSKOCIL, UNITED STATES BANKRUPTCY JUDGE.
Aleksey Vladimirovich Bazarnov (the "
On July 19, 2017, the Court heard final arguments on the Verified Petition and PPF's opposition thereto.
Poymanov is an individual citizen and resident of the Russian Federation (V. Pet. ¶ 4; PPF's Proposed Findings of Fact and Conclusions of Law (the "
After his acquisition of the Remaining P-Granit Shares, Poymanov caused P-Granit to borrow RUB 1.39 billion (which, at the time in 2009, equaled approximately U.S. $43.5 million) from Sberbank pursuant to three individual credit agreements (collectively, the "
The Petitioner asserts, and PPF does not contest, that on February 24, 2010, P-Granit and P-Invest defaulted on their respective payment obligations under the Credit Agreements. (V. Pet. ¶ 8) The history of the proceedings that followed is uncontested. On March 19, 2010, Sberbank accelerated the amount outstanding under the P-Invest Credit Agreement. (V. Pet. ¶ 8) Sberbank subsequently assigned its rights under the Credit Agreements to Sberbank Capital LLC ("
On September 29, 2011, Sberbank Capital initiated a case in the Commercial (Arbitrazh) Court of the Voronezh Region to recognize P-Granit as insolvent. That Court subsequently found P-Granit to be insolvent and an insolvency proceeding with respect to P-Granit (the "
On October 1, 2015, Suintex Limited ("
By complaint dated November 22, 2016 (the "
On March 3, 2017, the Petitioner commenced this Chapter 15 case and sought recognition of the Russian Insolvency Proceeding as a foreign main proceeding and recognition of the Petitioner as foreign representative. (V. Pet. pp. 2, 16) The Petitioner also seeks an order determining that the SDNY Action is subject to the automatic stay on the grounds that the SDNY Claims are property of Poymanov to be administered by the Petitioner. (V. Pet., Exh. A, Proposed Order; Petitioner's Reply to Obj. (the "
Under section 109(a), only a person who resides or has a domicile, a place of business, or property in the United States, or a municipality, may be a debtor under the Bankruptcy Code. 11 U.S.C. § 109(a). The eligibility requirements of section 109(a) apply in Chapter 15 cases. See Drawbridge Special Opps. Fund LP v. Barnet (In re Barnet), 737 F.3d 238, 247 (2d Cir. 2013). Thus, since Poymanov is a Russian citizen residing in Russia, the Court may not grant the relief requested in the Verified Petition unless Poymanov has a domicile, a place of business, or property in the United States. The Petitioner asserts that Poymanov has property in the United States in the form of (a) funds that the Petitioner transferred to a client trust account in New York that are held in trust as a
A debtor's funds held in a retainer account in the possession of counsel to a foreign representative constitute property of the debtor in the United States and satisfy the eligibility requirements of section 109(a). See In re Inversora Eléctrica de Buenos Aires S.A., 560 B.R. 650, 654 (Bankr. S.D.N.Y. 2016); In re Berau Capital Resources Pte Ltd., 540 B.R. 80, 82 (Bankr. S.D.N.Y. 2015); In re Octaviar Admin. Pty Ltd., 511 B.R. 361, 372 (Bankr. S.D.N.Y. 2014). The Petitioner testified that he funded the Retainer Account
PPF argues that the funds held in the Retainer Account are not Poymanov's
PPF has not presented any evidence to show that the funds transferred to the Retainer Account were not Poymanov's property before they were transferred to the Retainer Account. Nor has PPF proven that the funds are no longer Poymanov's property as a result of the Petitioner's allegedly improper transfer of the funds to the Retainer Account. Even assuming, arguendo, that the mechanism for transferring the Gureev Payments to the Retainer Account was not in accordance with Russian law, PPF has not demonstrated that, as a consequence of such improper transfer, Poymanov would be stripped of his property interest in the funds. At the Recognition Hearing, PPF's expert, Zhukov, testified that Poymanov had filed a complaint dated April 27, 2017 (the "
PPF also argues that the Retainer Account is not property of the foreign debtor because, according to Zhukov, the validity of the Gureev Agreements, which are governed by Russian law, theoretically could be challenged as invalid on the basis that the agreements are actually gifts to Poymanov by Gureev, rather than repayments of the P-Invest Debt, because there is little likelihood that Gureev will recover from P-Invest on account of the P-Invest Debt. Thus, Zhukov testified that the Gureev Agreements could be viewed as a "mock and sham" transaction under Russian law that could be voided by a Russian court. (May Tr. at 44:22-49:2) PPF has not presented any evidence that the Gureev Agreements have actually been voided by a Russian court, or that any proceeding has been initiated to void the agreements. Nor has PPF presented evidence to show that the Gureev Agreements are actually gifts and not agreements to pay a third-party debt.
In sum, the Court finds that the Petitioner has provided sufficient evidence to demonstrate that the Retainer Account is property in the United States belonging to Poymanov, and PPF has not rebutted that evidence. Accordingly, the Court concludes that the Petitioner has satisfied the eligibility requirements of section 109(a).
The Petitioner also asserts that the SDNY Claims constitute property of the debtor in the United States. (Pet'r Post Hr'g Br. ¶¶ 15-18) Because the Court finds that the Retainer Account satisfies the eligibility requirements of section 109(a), the Court need not consider whether the SDNY Claims are an additional basis for satisfying the section 109(a) eligibility requirements. However, the Court will address the extent to which the SDNY Claims constitute property of the foreign debtor, below, in connection with the Petitioner's argument that the SDNY Action is subject to the automatic stay pursuant to section 1520 of the Bankruptcy Code.
Section 1517(a) of the Bankruptcy Code provides that, subject to the public policy exception contained in section 1506, an order recognizing a foreign proceeding shall be entered if three conditions are met: (a) the foreign proceeding for which recognition is sought is either a foreign main proceeding or a foreign nonmain proceeding within the meaning of section 1502; (b) the foreign representative applying for recognition is a person or body; and (c) the petition is accompanied by the documents enumerated in sections 1515(b) and 1515(c). 11 U.S.C. § 1517(a).
Section 101(23) defines a "foreign proceeding" as
PPF argues that the Russian Insolvency Proceeding does not qualify as a "foreign proceeding" under section 101(23) because it is not a collective proceeding. (Obj. ¶ 50) A proceeding is collective if it considers the rights and obligations of all of a debtor's creditors, rather than a single creditor. See Armada (Singapore) Pte Ltd. v. Shah (In re Ashapura Minecham Ltd.), 480 B.R. 129, 140-41 (S.D.N.Y. 2012); In re ABC Learning Centres Ltd., 445 B.R. 318, 328 (Bankr. D. Del. 2011); In re Betcorp Ltd., 400 B.R. 266, 281 (Bankr. D. Nev. 2009). Boulatov, the Petitioner's expert witness, testified at the Evidentiary Hearing that, under Russian Bankruptcy Law, in proceedings such as the Russian Insolvency Proceeding, all creditors submit their claims against the debtor, and the Russian court then must determine whether to verify such claims. (May. Tr. at 23:10-14) Boulatov further testified that the statutory obligation of a receiver is to locate and sell all of a debtor's assets in accordance with Russian Bankruptcy Law, and then to distribute the proceeds from those sales "among all creditors, according to the rankings and priorities provided by law. So in this respect, it's a collective proceeding because all the creditors and the debtor are involved." (May. Tr. at 23:24-25:5) Similarly, the Petitioner testified at the Evidentiary Hearing that, in the Russian Insolvency Proceeding, he is obligated to marshal the debtor's assets for the benefit of all of the debtor's creditors whose claims have been verified by the Russian Court. (Apr. Tr. at 26:6-20). The Court found both Mr. Boulatov and the Petitioner to be credible witnesses. Their testimony that the Russian Insolvency Proceeding is collective is bolstered by the Russian Court Decision, which refers to creditors' meetings that have been conducted in the Russian Insolvency Proceeding.
PPF has not produced any evidence that contradicts the testimony of the Petitioner or Boulatov on these points or suggested that any creditors, or groups of creditors, have been denied an opportunity to participate in the Russian Insolvency Proceeding. Nor has PPF provided any evidence that the rights or obligations of all creditors are not considered in the Russian Insolvency Proceeding. Instead, PPF contends that the Russian Insolvency Proceeding is not collective because it is "an involuntary action instituted by the [Petitioner's] co-defendants as a tool in the Reiderstvo scheme to steel [sic] Poymanov's company, put co-conspirator Bazarnov in control, and provide no benefit to the Debtor or his creditors." (Obj. ¶ 50) As discussed below, PPF has not provided any evidence to support a finding that the Russian Insolvency Proceeding was commenced for the purpose of stealing either P-Granit or P-Invest from Poymanov, or that the Petitioner has participated in any conspiracy to gain control of "Poymanov's company." To the contrary, the Russian Court found that Suintex's application for declaring Poymanov insolvent should be granted because, inter alia, Poymanov had monetary obligations owing to Suintex that were overdue for more than three months, including the Moscow Court Judgment in the amount of RUB 4,620,228,024.75 (which was upheld on appeal and subsequently
Section 1517(b) of the Bankruptcy Code provides that a foreign proceeding shall be recognized as a foreign main proceeding if it is pending in the country where the debtor has the "center of its main interests." 11 U.S.C. § 1517(b). In the absence of evidence to the contrary, an individual foreign debtor's habitual residence is presumed to be the center of the debtor's main interests. See 11 U.S.C. § 1516(c). Poymanov is a Russian citizen and resides in Russia. (V. Pet. ¶ 4; Obj. ¶ 7) No evidence to the contrary has been provided by PPF. Accordingly, the Court finds and concludes that the Russian Insolvency Proceeding is a "foreign main proceeding" under section 1517(b).
Section 101(24) defines a "foreign representative" as
11 U.S.C. § 101(24). Section 1516 provides that "[i]f the decision or certificate referred to in section 1515(b) indicates that. . . the person or body is a foreign representative, the court is entitled to so presume." 11 U.S.C. § 1516(a). It is uncontroverted that the Russian Court appointed the Petitioner as the financial administrator in the Russian Insolvency Proceeding and directed him to "analyze the financial condition of the debtor, evidence of intentional or fraudulent bankruptcy [and] submit an individual's debt restructuring plan." See Russian Court Ruling, Boulatov Decl., Exh. B. The Russian Court ruled subsequently that Poymanov was insolvent, and appointed the Petitioner as the financial administrator charged with conducting a sale of Poymanov's assets. See Russian Court Decision, Boulatov Decl., Exh. C. Accordingly, the Petitioner qualifies as a foreign representative under section 101(24).
Notwithstanding that the Petitioner qualifies as a foreign representative as the term is defined in section 101(24) of the Code, PPF argues that the Petitioner's "actual conflict of interest and breach of fiduciary duty to Poymanov's creditors warrant denial of recognition of Bazarnov as a proposed foreign representative . . . ." (Obj. ¶ 54) PPF further contends that the Petitioner does not qualify as a foreign representative because he commenced this Chapter 15 case only to further his own interests. PPF asserts that the Petitioner commenced this Chapter 15 case to:
(Obj. ¶ 53) PPF asserts that the Petitioner's conflict of interest is evidenced by the Petitioner's failure to:
The definition of "foreign representative" in section 101(24) requires only that the person or body seeking to be recognized as a foreign representative be appointed and authorized in a foreign proceeding to administer the reorganization or the liquidation of the debtor's assets or affairs, or to act as a representative of such foreign proceeding. There is no requirement that such person or body satisfy a disinterested test. The text of section 101(24) is not ambiguous on this point, and it would be inappropriate for the Court to read into it any additional requirements. "[W]hen [a] statute's language is plain, the sole function of the courts—at least where the disposition required by the text is not absurd—is to enforce it according to its terms." Lamie v. U.S. Trustee, 540 U.S. 526, 534, 124 S.Ct. 1023, 157 L.Ed.2d 1024 (2004); see also Lee v. Bankers Trust Co., 166 F.3d 540, 544 (2d Cir.1999) ("It is axiomatic that the plain meaning of a statute controls its interpretation, and that judicial review must end at the statute's unambiguous terms.") (internal citation omitted). Similarly, there is no requirement that a foreign representative be free of any conflict of interest, however speculative or remote. See, e.g., In re OAS S.A., 533 B.R. 83, 98-101 (Bankr. S.D.N.Y. 2015). In the OAS Chapter 15 case, holders of notes that were guaranteed by the foreign debtor argued that the proposed foreign representative (Tavares) should not be recognized as such because he could not meet neutrality requirements and held an inherent conflict of interest. See In re OAS S.A., 533 B.R. at 98. In concluding that Tavares was duly appointed and qualified to act as the "foreign representative," the Court explained that whether Tavares performs his duties is a question that is different from whether he is authorized to perform the duties set forth in section 101(24). See id. After concluding that Tavares was authorized to administer the foreign debtors' reorganization, the court concluded that he therefore qualified as a foreign representative. See id. The Court further held that there is no requirement under section 1505 that a foreign representative satisfy a neutrality test because section 1505 "does not modify or otherwise impose unstated requirements on the definition of `foreign representative' in Bankruptcy Code § 101(24) . . . ." Id. at 99-100.
PPF has not in any way rebutted the undisputed fact that the Russian Court duly appointed the Petitioner and authorized him to perform the duties set forth in section 101(24). The Court agrees with the holding in OAS and finds that the mere
Moreover, notwithstanding that there is no disinterestedness requirement in section 101(24), the Court finds and concludes that PPF has not provided any evidence to support its contentions that the Petitioner has a conflict of interest or has taken actions that should disqualify him from being recognized as a foreign representative. At the outset, PPF cannot manufacture a conflict of interest simply by asserting claims against the Petitioner in a complaint after he has been appointed by the Russian Court. Moreover, the Petitioner's failure to investigate the employment history of Gureev before accepting the Gureev Payments, or Gureev's motive for making the payments, does not evidence the Petitioner's bad faith, impropriety or involvement in a scheme or conspiracy against Poymanov. At the Evidentiary Hearing, the Petitioner testified that the Gureev Payments were payments, by Gureev, of a debt owing to Poymanov by P-Invest, and that the debt had been confirmed by a ruling of a Russian Court in the P-Invest Insolvency Proceeding. (Apr. Tr. at 63:18-23) The Petitioner further explained that he is not obligated to investigate Gureev's personal motivation for making the Gureev Payment: "I really cannot tell you what was the motivation of that person in paying this debt. My task is to form, to aggregate the bankruptcy estate, and since that amount, that debt was confirmed by the ruling of a commercial court, my task was to accept the money and make it part of the bankruptcy estate." (Apr. Tr. at 63:3-11, 66:9-13) PPF has not controverted this testimony by providing evidence that the Petitioner had any obligation under Russian law to investigate Gureev's motivation, or his financial wherewithal. The testimony of Zhukov (PPF's expert on Russian Bankruptcy Law and Poymanov's personal counsel) that a party could, theoretically, seek to void the Gureev Payments by proving that Gureev acted in bad faith in making the payment does not evidence any bad faith or conflict of interest on the part of the Petitioner. Moreover, how the Petitioner obtained the funds held in the Retainer Account and why Gureev made the Gureev Payments is legally irrelevant for purposes of the section 109(a) issue before the Court. See Decision on PPF Motion, pp. 11, 12.
The Court further finds that neither (a) the Petitioner's failure to initially deposit the Gureev Payments into the Principal Account nor (b) the Petitioner's failure seek approval from the Russian Bankruptcy Court to retain the Petitioner's counsel prior to transferring the Gureev Payments evidences a conflict of interest or bad faith of the Petitioner. The wire transfer documents, which were offered by PPF and received into evidence, contain the following remittance information: "DEPOSIT ON ACCOUNT OF CONTEMPLATED COSTS OF LITIGATION BY A.V. BAZARNOV, FINANCIAL ADMINISTRATOR, FROM THE BANKRUPTCY ESTATE OF S.P. POYMANOV." (PPF Hrg. Exh. 5) (emphasis added)
Similarly, the Petitioner's failure to list in his periodic report (which identifies Poymanov's assets) Poymanov's "claims regarding the illegal seizure of his interests in P-Granit and P-Granit Invets [sic] as an asset in his bankruptcy" (PPF's Post Hr'g Br. ¶¶ 26, 35), and failure to pursue such claim, does not evidence a conflict of interest or any impropriety. PPF argues that the valuation of Poymanov's shares in P-Granit and P-Invest was improper, as such shares were undervalued, and the Petitioner should have included Poymanov's claims with respect to this undervaluation
(Apr. Tr. at 90:14-91:19) Moreover, the Petitioner asserts, and PPF has not denied, that the "issues concerning the valuation of the auctioned shares were fully and extensively litigated on several occasions" and that pursuant to a decision of Krasnogorsky City Court of the Moscow Region, dated November 7, 2011, in Case No. 2-4672/11, that court rejected the valuation introduced by Poymanov because the proposed valuation "contains contradictory information, the source data used in the calculations is not supported by reliable sources, calculations and reasons are not presented in full." (V. Pet. ¶ 21) The Court further notes that the Russian Court dismissed Poymanov's application to force the Petitioner to assess the value of Poymanov's shares. See Russian Court Decision, Boulatov Decl., Exh. C. Accordingly, the Court finds that, even if such issues were relevant to whether the Petitioner qualifies as a foreign representative, PPF has not demonstrated that the Petitioner, in fact, has acted in bad faith or has any conflict of interest.
To establish a basis for recognition under Chapter 15, the petition must be supported by documentation on which this Court may ground recognition. See 11 U.S.C. §§ 1515(b), (c). The Russian Court Ruling and the Russian Court Decision, attached to the Boulatov Declaration as Exhibits B and C, satisfy the requirements of section 1515(b). In addition, section 1515(c) provides that a "petition for recognition shall also be accompanied by a statement identifying all foreign proceedings with respect to the debtor that are known to the foreign representative." 11 U.S.C. § 1515(c). The Court finds that the Petitioner has complied with this requirement. See V. Pet. ¶ 58.
Recognition of a foreign proceeding under section 1517(a) of the Bankruptcy Code is expressly made subject to Bankruptcy Code section 1506, which sets forth a public policy exception under Chapter 15. Section 1506 of the Bankruptcy Code authorizes courts to refuse to take actions governed by Chapter 15 of the Code if such actions would be "manifestly contrary to the public policy of the United States." 11 U.S.C. § 1506.
PPF argues that the Court should exercise its discretion and refuse to recognize the Russian Insolvency Proceeding as a foreign main proceeding because recognition would be contrary to public policy for the following reasons:
Courts may only refuse to take actions under section 1506 if granting the relief at issue would be "manifestly" contrary to U.S. public policy. The public policy exception set forth in section 1506 is narrowly construed and invoked only under exceptional circumstances that concern matters of fundamental importance to the United States. See, e.g., Morning Mist Hldgs. Ltd. v. Krys (In re Fairfield Sentry Ltd.), 714 F.3d 127, 139 (2d Cir. 2013) (citing GUIDE TO ENACTMENT OF THE UNCITRAL MODEL LAW ON CROSS-BORDER INSOLVENCY, promulgated by the United Nations Commission on International Trade Law UNCITRAL, H.R.REP. NO. 109-31(I), at 109 (2005)); In re Rede Energia S.A., 515 B.R. 69, 92 (Bankr. S.D.N.Y. 2014) ("the few reported cases that have analyzed [section] 1506 at length recognize that it is to be applied sparingly") (quoting In re Toft, 453 B.R. 186, 193 (Bankr. S.D.N.Y. 2011)). The party invoking the public policy exception bears the burden of proof. See In re Ashapura Minechem Ltd., No. 11-14668, 2011
PPF has made no showing that granting recognition to the Russian Insolvency Proceeding would in any way be manifestly contrary to the public policy of the United States or repugnant to any matter of fundamental importance to the United States. As discussed above, the Court finds that PPF has not presented any evidence of impropriety with respect to the Petitioner's entry into the Gureev Agreements, as PPF has not demonstrated that the Petitioner had any duty to investigate Gureev's motive for paying the P-Invest Debt. Nor is there any public policy of the United States that would be offended by granting recognition to a foreign proceeding involving the sale of distressed debt at issue here. Similarly, the fact that the Petitioner transferred the Gureev Payments to the Retainer Account from an account other than the Principal Account or that the Petitioner may have not obtained requisite approval from the Russian Court before retaining Petitioner's U.S. counsel and transferring the funds to the Retainer Account does not implicate or offend any matters of U.S. public policy. Nothing about the transfer of funds to the Retainer Account violates U.S. law or public policy.
The Court further finds that PPF has failed to present any evidence that the Russian Insolvency Proceeding is part of a corporate raiding scheme against Poymanov. Shelley, PPF's expert witness, provided general testimony as to the occurrence of reiderstvo in Russia. However, PPF has not demonstrated that the Petitioner has engaged in any bad faith dealing or criminal activity in connection with the Russian Insolvency Proceeding (or otherwise). Nor has PPF demonstrated that there has been any impropriety or corruption attributable to the Russian Court in connection with the Russian Insolvency Proceeding. There is simply no evidence that the Russian Insolvency Proceeding is the result of anything other than the undisputed defaults under the Credit Agreements, the foreign debtor's failure to make the payments under the Poymanov Guarantee, and the Moscow Judgment that was upheld on appeal.
The Petitioner seeks an order declaring that the SDNY Action is subject to the automatic stay. Section 1520 provides that, upon recognition of a foreign proceeding as a foreign main proceeding, the automatic stay set forth in section 362 of the Bankruptcy Code applies with respect to the debtor and the property of the debtor that is within the territorial jurisdiction of the United States. 11 U.S.C. § 1520(a)(1). Because the Russian Insolvency Proceeding qualifies as a foreign main proceeding and the Court hereby grants such recognition, any act to exercise control over Poymanov's property within the territorial jurisdiction of the United States is subject to the automatic stay in accordance with section 362 of the Bankruptcy Code. Thus, the SDNY Action is subject to the automatic
A determination of whether any portion of the SDNY Claims constitute property of Poymanov necessarily must turn on a threshold determination as to whether the purported transfer or assignment of the SDNY Claims by Poymanov and Podgornaya (the "
The Petitioner contends that, but for challenged the PPF Assignment, a portion of the SDNY Claims would be property of Poymanov which, under Russian Bankruptcy Law, only the Petitioner is authorized to pursue. Specifically, the Petitioner asserts that, pursuant to Article 213.24 of the Russian Bankruptcy Law, once a debtor is declared bankrupt, only the financial administrator, not the debtor, is authorized to exercise rights with respect to the debtor's property and to collect and dispose of such property for the benefit of the debtor's creditors. (Boulatov Decl. ¶ 18) Such property would include, subject to limitations that are inapplicable here, causes of action belonging to the debtor. (Boulatov Decl. ¶ 19) Such property may also include a portion of the SDNY Claims that Podgornaya allegedly assigned to PPF. Boulatov testified that, to the extent that Podgornaya acquired her shares after her marriage to Poymanov, a portion of her claims may constitute marital property to be administered by the Petitioner in the Russian Insolvency Proceeding for the benefit of Poymanov's creditors. (May Tr. at 24:6-25:37) The Petitioner further asserts that, pursuant to Article 213.25(5) of the Russian Bankruptcy Law, all transactions made by a debtor who has been declared bankrupt (as opposed to such transactions made by the financial administrator acting on his/her behalf) with respect to the debtor's assets, subject to exceptions that are inapplicable here, are deemed void ab initio. (Boulatov Decl. ¶ 20)
Although Poymanov has not complied with the Petitioner's request to provide him with a copy of the PPF Assignment (Apr. Tr. at 44:16-19), and therefore the Petitioner has no way of verifying the date on which the PPF Assignment occurred (V. Pet. ¶ 35), the Petitioner contends that the PPF Assignment could not have taken place before the date on which Poymanov was declared insolvent in the Russian Insolvency Proceeding (July 21, 2016) because Delaware state records show that PPF was formed by PPF's counsel on November 21, 2016, the day before PPF commenced the SDNY Action. (V. Pet. ¶¶ 32-34, n.18) Thus, the Petitioner contends that, because the PPF Assignment occurred while the Russian Insolvency Proceeding was pending, as a matter of Russian Insolvency Law, the assignment is void ab initio. (Pet'r Post Hr'g Br. ¶¶ 15-18) PPF maintains that the SDNY Claims belong to PPF. (Obj. ¶¶ 37-41) PPF has not taken a position as to the date of the
The Petitioner has filed two applications with the Russian Court seeking a ruling that the PPF Assignment is void as a matter of Russian Bankruptcy Law (together, the "
Because this Court is granting recognition to the Russian Insolvency Proceeding as a foreign main proceeding, there is no question that the stay set forth in section 362 automatically applies to property of Poymanov that is within the United States. See 11 U.S.C. § 1520(a)(1). The extent to which the SDNY Claims constitute property of Poymanov (or property of PPF) requires a determination of Russian Bankruptcy Law. This matter is currently pending before the Russian Court in connection with the Assignment Applications and it would not be appropriate for this Court, under the circumstances of this ancillary case, to issue a ruling construing Russian Bankruptcy Law in advance of the Russian Court's ruling on the same issue. This is particularly the case here, not only because the issue turns on the application of Russian Bankruptcy Law, but also because certain factual information necessary to make such a determination (e.g. the date on which Podgornaya acquired her shares in P-Granit, the existence of an assignment agreement, the documentation of the agreement, and the date of the assignment) is outstanding, and the Russian Court has issued a request to the appropriate Russian institutions for the production of certain of this information. Thus, not only does the Court lack the information necessary to make a determination as to the validity of the PPF Assignment, any attempt to do so would undermine the Russian Court's ability to administer the foreign main proceeding. Such a result would be at odds with one of the fundamental purposes of Chapter 15, which is to provide an efficient mechanism for cooperation between U.S.
Accordingly, the Court concludes that the automatic stay applies with respect to property of Poymanov within the territorial jurisdiction of the United States. The Court finds that the extent to which the SDNY Claims are property of Poymanov to be administered in the Russian Insolvency Proceeding, and, as such, subject to the automatic stay, is subject to a non-frivolous suit that is pending before the Russian Court. If the Russian Court issues an order in favor of the Petitioner on the Assignment Applications, the Petitioner may then seek to enforce the automatic stay in this Court with respect to the SDNY Action. In the event that PPF proceeds with the SDNY Action while the Assignment Applications are pending in Russia, it does so at its peril, and the Petitioner has recourse under section 362(k) for any damages he may sustain in the event it is proven that PPF willfully violated the automatic stay.
For the reasons set forth above, the Court hereby finds and concludes that:
