Vol 21 (2024) - Issue 3

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New York Court Casts Doubt over Creditors Pursuing Discovery in Chapter 15 Cases

Synopsis
Is discovery in chapter 15 available only to the foreign representatives, or to third parties as well? The Golden Sphinx case opened the door for creditors seeking discovery. There, the judge considered a motion by Golden Sphinx's principal creditor to conduct discovery, and while the creditor's motion was ultimately denied, the judge concluded that creditors may conduct limited discovery in chapter 15 cases. Recently, in In re Americanas, the court denied a creditor's motion for discovery under Bankruptcy Rule 2004, finding it was not appropriate for a creditor to seek discovery in the U.S. when the creditor could have pursued discovery in Brazil, the location of the foreign main proceeding.