Vol 16 (2019) - Issue 1

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Chapter 15 Court Balances Competing Comity Concerns and Grants Conditional Approval of Croatian Restructuring Plan (In re Agrokor, 2018 WL 5298403 (Bankr. SDNY))

Synopsis

In a recent ruling, the US Bankruptcy Court of the Southern District of New York (the 'Bankruptcy Court') granted conditional recognition and approval of a restructuring plan for Agrokor d.d. ('Agrokor') and eight of its affiliates (collectively, with Agrokor, the 'Debtors') that had previously been approved in Croatian restructuring proceedings before the Commercial Court of Zagreb in Croatia. In a case under chapter 15 of the US Bankruptcy Code, the Bankruptcy Court ruled that the Debtors’ restructuring plan or 'Settlement Agreement,' once finally approved in Croatia, would be enforceable within the territorial jurisdiction of the United States, despite apparent conflicts with English law, which governed approximately €1.66 billion of the Debtors’ indebtedness. Specifically, the Bankruptcy Court held that comity should be granted to the Settlement Agreement in the US, despite that it purported to modify the terms of English-law governed indebtedness, in contravention of English law.