Restructuring and Insolvency Bulletin: Issue 4 - May 2018: If You Don’t Succeed in Anguilla, Should You Try Again in the US?

by Dechert LLP

Dechert LLP

Two United States Bankruptcy Judges for the Southern District of New York recently issued a joint opinion addressing common issues raised by motions to dismiss in two separate adversary proceedings – one pending before Judge Bernstein and the other before Judge Glenn (the “Adversary Proceedings”). The Adversary Proceedings were filed by the debtors in two chapter 11 cases, each involving an Anguillan offshore bank – National Bank of Anguilla (Private Banking Trust) Ltd. and Caribbean Commercial Investment Bank Ltd. (the “Debtor Banks”). In their motions to dismiss, the defendants argued that the Debtor Banks, by filing their claims in the U.S., were merely forum shopping in order to prosecute constructive fraudulent transfer claims under the U.S. Bankruptcy Code, a claim not recognized under Anguillan law. Both bankruptcy judges agreed that the cases should be stayed based on forum non conveniens and international comity, pending adjudication of issues that have been, or can be, raised in Anguilla. 

The Parties

The Debtor Banks were incorporated and licensed in Anguilla and operated as commercial offshore banks (banks that operated within Anguilla, but served only non-Anguillan customers). The Debtor Banks were both wholly owned by onshore parent companies that managed their administrative and banking operations (the “Parent Banks”). The Parent Banks were regulated by the Eastern Caribbean Central Bank (“ECCB”), the monetary authority and regulator of the domestic banking systems of certain Caribbean territories. The Debtor Banks filed their complaints in the Adversary Proceedings (the “Complaints”) against the Parent Banks, the ECCB, and the National Commercial Bank of Anguilla Ltd. (“NCBA”).   

The Anguillan Conservatorships and Receiverships

The 2008 global financial crisis severely stressed the Eastern Caribbean banking sector. The impact of the crisis was particularly pronounced in Anguilla, where economic activity contracted and the country continued to experience negative growth through 2012. Anguillan commercial banks uniformly realized significant declines in earnings and deterioration of capital levels. Around 2011, the ECCB began monitoring the affairs of the Parent Banks, and placed each Parent Bank into conservatorship in 2013. The principal aim of the conservatorships was to stabilize and restructure the Debtor Banks. To accomplish this aim, the ECCB removed the Parent Banks’ directors and appointed conservator directors (the “Conservator Directors”) to prepare a rescue plan and restrict the Debtor Banks’ access to the Parent Banks’ deposits.  

The Complaints alleged that during the conservatorships, the Conservator Directors assumed control of the Debtor Banks and, as de facto directors, breached their fiduciary duties to the Debtor Banks by procuring or permitting the payment of each Debtor Bank’s customer deposits (the “Funds”) to the Parent Banks’ New York bank accounts. In addition, the Complaints claimed that the Parent Banks, prior to and while under the management of the Conservator Directors, upsteamed millions of dollars to the ECCB, which rendered the Debtor Banks insolvent and unable to pay their depositors. 

The conservatorships continued until April 2016 when the ECCB developed a plan to resolve the Parent Banks’ financial problems and appointed a receiver of both Parent Banks. The Parent Banks subsequently ceased banking operations in Anguilla, and transferred their banking operations, including the Funds, to the NCBA (a newly-formed bank created in 2016 and wholly owned by the government of Anguilla). The NCBA then transferred the Funds from the Parent Banks’ New York bank accounts to another account under NCBA’s control, without making any provision to repay the Debtor Banks.      

The Pending Anguillan Proceedings

On May 6, 2016, the Debtor Banks brought suit in the Supreme Court in the High Court of Anguilla (the “High Court”) against the Parent Banks and NCBA, and made the same essential arguments made later in the Complaints. Because the Parent Banks were in receivership at the commencement of these proceedings, a stay was in effect as to all legal proceedings against them. The Debtor Banks applied to lift the stay, but the High Court rejected the application due to the Debtor Banks’ failure to join the Conservator Directors as parties (the “Stay Order”). The High Court also explained that the dismissal was justified by the Conservator Directors’ possible immunity. The Debtor Banks appealed the Stay Order. 

Additionally, on March 10, 2017, the Debtor Banks filed an application for leave to apply for judicial review against the Chief Minister of Anguilla, the Attorney General of Anguilla in his official capacity as a legal representative of the Government of Anguilla, the receiver of the Parent Banks and the ECCB (the “Judicial Review Application”). The Judicial Review Application claimed that the respondents unfairly discriminated against the Debtor Banks by guaranteeing repayment of deposits of all onshore depositors, but not of offshore depositors. The High Court stayed the Judicial Review Application until the earlier of either a final determination in the Adversary Proceedings or a final settlement agreement between the parties to the Adversary Proceedings. 

Along with to the proceedings commenced by the Debtor Banks, depositors of the Debtor Banks brought an action in the High Court against the Conservator Directors. The depositors alleged the same set of facts as in the Complaints, but asserted that the claims belonged to the Debtor Banks’ depositors rather than the Debtor Banks. On February 22, 2017, the High Court issued its judgement finding that the defendants had acted ultra vires. The defendants appealed the High Court’s judgement. 

The Insolvency Proceedings

On February 22, 2016, the High Court entered an order placing the operations of the Debtor Banks in administration. The High Court appointed a foreign representative as administrator of the Debtor Banks (the “Foreign Representative”), and specifically authorized him to commence or continue, without further order of the High Court, any foreign proceeding necessary to fulfill his duties and obligations. Pursuant to this authority, the Foreign Representative filed chapter 15 petitions in the Bankruptcy Court for the Southern District of New York on behalf of the Debtor Banks. The Bankruptcy Court granted the petitions, thereby recognizing the Anguillan administrations as foreign main proceedings and the Foreign Representative as the Debtor Banks’ foreign representative. The same Foreign Representative in the chapter 15 cases subsequently filed the chapter 11 cases. The chapter 11 cases were filed for the ostensible purpose of filing federal avoidance actions against the defendants, as section 1521(a)(7) of the U.S. Bankruptcy Code does not permit avoidance claims under specific sections of the Bankruptcy Code to be brought in a chapter 15 case, and, as freely admitted by the Debtor Banks, Anguillan law does not recognize constructive fraudulent transfer claims.

The Motions to Dismiss

While the defendants sought to dismiss the Adversary Proceedings on several grounds, each of the defendants asserted that the Adversary Proceedings be dismissed on grounds of forum non conveniens and international comity. In response, the Debtor Banks argued that dismissal was not warranted because many of the transfers at issue occurred in New York, and because the High Court specifically authorized the Debtor Banks to commence actions in foreign jurisdictions and issued a stay of the Judicial Review Application pending the outcome of the Adversary Proceedings. In addition, the Debtor Banks urged denial of the motions to dismiss precisely because Anguillan law does not recognize a claim based on a constructive fraudulent transfer. 

The Court’s Decision

In analyzing the motions to dismiss, the Bankruptcy Court applied the three-step process used in the Second Circuit to determine whether to dismiss an action under forum non conveniens. Iragorri v. United Techs. Corp., 274 F.3d 65, 73–74 (2d. Cir. 2001). The first step is to determine the degree of deference properly accorded to the Debtor Banks’ choice of forum. The Bankruptcy Court found that the Debtor Banks’ choice of forum was not entitled to deference, largely because the choice of a New York venue was an exercise in forum shopping. The Debtor Banks commenced the Adversary Proceedings only after the High Court issued the Stay Order, stymying their efforts to recover on substantially similar claims. The High Court refused to lift the stay to allow the Debtor Banks to proceed against the Parent Banks based on their failure to join the Conservator Directors, and the plaintiffs then commenced the Adversary Proceedings in the U.S. rather than join the Conservator Directors in the Anguillan proceedings.  

The second step is to determine whether an adequate alternative forum exists. The parties did not contest, and the Bankruptcy Court previously found, that the Anguillan courts are competent to adjudicate disputes. Additionally, although Anguillan law does not recognize a claim to avoid and recover a constructive fraudulent transfer, this does not render the Anguillan forum inadequate. In fact, other causes of action asserted by the Debtor Banks in the Anguillan proceedings provide the same remedy that the Debtor Banks sought in the U.S. – the recovery of the upstreamed Funds and transferred property. Therefore, the Bankruptcy Court held that Anguilla was an adequate alternate forum for the litigation.

The final step is to evaluate factors involving the private interests of the parties in maintaining the litigation in the U.S. as well as the public interests at stake. As to private interests, the Bankruptcy Court noted that all of the Conservator Directors and the ECCB’s actions took place in Anguilla or the Eastern Caribbean, and their availability, the ability to compel their attendance, and the relative ease and access to proof weighed heavily in favor of the Anguillan forum. The public interest factors also favored dismissal as parallel litigations were pending in Anguilla and the Adversary Proceedings related to the bailout of two Anguillan banks, which were authorized, directed and controlled by the ECCB, an arm of the Anguillan State. As the legality of the actions taken by the Conservator Directors must be determined in accordance with the ECCB Act and applicable Anguillan law, the Bankruptcy Court concluded that Anguilla had an overwhelming interest in determining the legality of the Conservator Directors’ actions and the extent of the defendants’ liability.  

The Court further held that the Adversary Proceedings should be stayed on the basis of international comity. Comity consists of two doctrines: comity among nations and comity among courts. Comity among nations is a cannon of construction that limits the reach of a statute such that it does not govern conduct that is subject to the jurisdiction of foreign countries. This doctrine limits the reach of the U.S. Bankruptcy Code avoidance provisions to transfers that are subject to U.S. law. Comity among courts involves a discretionary authority of a national court to decline to exercise jurisdiction over a case when the case is also pending in a foreign court with proper jurisdiction. 

The Court held that comity among courts required that the U.S. Adversary Proceedings be stayed because the Anguillan court had proper jurisdiction and the Anguillan proceedings did not prejudice the rights of U.S. citizens or violate U.S. domestic public policy.

Rather than dismiss the Adversary Proceedings, however, the Court stayed them pending the outcome of the litigation in Anguilla, since a stay is an alternative that should normally be considered before dismissal on comity grounds and allows the Court a narrow window for intervention, if required.

Lessons Learned

Every case should be approached with a plan designed to enhance its ultimate success; this is essential, however, for complex, multi-jurisdictional insolvency cases. Choice of the initial venue may be a critical component of the overall likelihood of success. A bad initial choice, may not be easily avoided.  

Read the opinion »

*The author would like to thank Alaina Heine for her contributions to the article.

Written by:

Dechert LLP

Dechert LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at:

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit
  • New Relic - For more information on New Relic cookies, please visit
  • Google Analytics - For more information on Google Analytics cookies, visit To opt-out of being tracked by Google Analytics across all websites visit This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at:

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.