New ‘Substantial Doubt’ Standard for Foreign Judgment Enforcement in Fla.

A recent change to a state law concerning the recognition and enforcement of foreign judgments in Florida may make it easier to avoid payment of valid debts.

By Arnoldo B. Lacayo, Juan J. Mendoza and Andres H. Sandoval

 

Left to right: Juan Mendoza, Andres Sandoval and Arnoldo B. Lacayo, Sequor Law

A recent change to a state law concerning the recognition and enforcement of foreign judgments in Florida may make it easier to avoid payment of valid debts. An amendment to the Uniform Out-of-Country Foreign Money- Judgment Recognition Act (the act) adds two further grounds for denial of recognition of foreign country money-judgments, potentially making it harder to recognize and enforce foreign judgments in the Sunshine State, a jurisdiction already viewed domestically and abroad as a debtor’s haven due to its generous exemptions.

On March 19, House Bill No. 623 was signed into law and, per Article III, Section 9 of the Florida Constitution, went into effect on May 9. The bill adds two discretionary grounds to Section 55.605(2), Fla. Stat., to challenge recognition of a foreign money-judgment. Under these additional grounds, a Florida court need not recognize a foreign money-judgment if the judgment was rendered in circumstances that “raise substantial doubt about the integrity of the rendering court” or “the specific proceeding in the foreign court leading to the judgment was not compatible with the requirements of due process of law.” These new grounds apply only to judgments of other countries and not to judgments of other U.S. states, territories or commonwealths.

Enacted in Florida in 1994, the act largely follows the 1962 version of the Uniform Foreign Money-Judgments Recognition Act (the Uniform Act), promulgated by the National Conference of Commissioners on Uniform State Law (the NCCUSL). The act applies to final, conclusive, and enforceable money-judgments of other countries. Generally, such judgments are entitled to recognition under the act; however, there are several mandatory and discretionary grounds set forth in Section 55.605, Fla. Stat., upon which a court may deny recognition.

While the purpose of the act is to “provide a speedy and certain framework for recognition of foreign judgments,” Laager v. Kruger, 702 So. 2d 1362, 1363 (Fla. 3d DCA 1997), in practice, this may not be the case.

At first glance, the new amendment may seem unnecessary as the act already provides avenues to challenge recognition of a foreign judgment if it is “rendered under a system which does not provide impartial tribunals or procedures compatible with the requirements of due process of law,” or if it is “obtained by fraud.” The official comment to the Uniform Act draws a distinction between the new and existing grounds by stating that the focus of these two new grounds is on the integrity and procedure of the specific court that rendered the judgment, rather than on the judicial system of the foreign country.

Nevertheless, one potential concern is that the amendment invites a case-by-case review of foreign judgments, rather than further the “speedy and certain framework” the act intended to establish. This concern is compounded by the uncertainty as to the application of the nebulous “substantial doubt” standard when evaluating the “integrity” of the foreign court. Based on this language, some may argue that a debtor need only present enough evidence to raise substantial doubt in the mind of the trier of fact rather than affirmatively demonstrating fraud. Thusly, at face value, the amendment appears to welcome the enterprising debtor to argue the interpretation and limits of these new provisions in an effort to delay and possibly frustrate the recognition and enforcement of a legitimate foreign judgment.

Though the “substantial doubt” standard appears broad and ambiguous, it should in fact be narrowly interpreted. The NCCUSL explains that the standard is tantamount to “a showing of corruption in the particular case that had an impact on the judgment that was rendered.” At least two courts have followed the NCCUSL’s guidance in this respect. See In re Carmona, No. 16-50155, 2018 WL 889358, at *13 (Bankr. S.D. Tex. Jan. 19, 2018); Savage v. Zelent, 243 N.C. App. 535, 545 (2015). Neither found “substantial doubt” as to the integrity of the foreign court.

In short, the new amendment may leave room for abuse if courts do not adhere to the guidance of the Uniform Act and the interpretation of other courts. If so, the nebulous “substantial doubt” standard should have minimal impact for experienced creditor’s rights and asset recovery lawyers seeking to enforce valid foreign judgments entitled to recognition in Florida.

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Partner Q&A

This June, we welcomed two new powerhouse attorneys as partners at Sequor Law. We sat down with Leyza Blanco and Fernando Menendez to discuss what led them to our firm, their viewpoints on their unique practice areas, and their interests and community involvement.

Why did you decide to join Sequor Law?

  • Fernando – Being geographically situated in Miami, which serves as a gateway to Latin America and a hub for international business, Leyza and I were excited by the possibilities presented in joining a firm with a great depth of experience and knowledge in the international asset recovery arena. We have known the lawyers at Sequor Law professionally for many years and greatly admire their practice. We believe that our addition to this exceptional team creates natural synergies, adds to the firm’s resources and helps us all respond to the needs of our clients worldwide.
  • Leyza – Sequor Law presented an excellent opportunity to join professional colleagues who are world-class experts in the fields of Insolvency, Creditors’ Rights and Asset Recovery, and who would augment my cross-border practice with an already established global presence in those fields.

What do you think is unique about the firm?

  • Fernando – The firm’s depth of experience in international asset recovery matters is truly impressive. In the few short weeks since joining the firm, I’ve had the opportunity to assist clients and work with global teams on matters with ties, not only to the U.S., but to the U.K., Gibraltar, Luxembourg, Panama, Turkey, and Romania. I don’t know that I could say that anywhere else.
  • Leyza – Sequor Law is unique because it is a specialized firm with a niche practice and global reach in the Insolvency, Restructuring and Asset Recovery space.

How are your practice areas important for Sequor, and/or in general?

  • Fernando – I’ve focused my practice on bankruptcy and creditors’ rights matters for some time. Sequor’s focus on representing companies and individual clients in the areas of asset recovery, financial fraud, insolvency and financial services litigation fits perfectly within the scope of the work I’ve done throughout my career. I believe that our addition to the team will amplify the firm’s already formidable resources, and allow us to better assist and respond to the needs of our clients, whenever and wherever they may arise.
  • Leyza – Our practice areas have synergy with Sequor’s existing cross-border insolvency and restructuring practices. We look forward to adding to Sequor’s already deep bench in these areas.

How do you see your practice areas evolving or changing in the next 5-10 years?

  • Fernando – In a world that (at least as it relates to commerce) is getting smaller by the day, I see the scope of my work expanding to meet the needs of U.S.-based clients engaged in international business, and to assist clients in their asset recovery efforts around the world.
  • Leyza – I see our practice evolving to expand the use of U.S. Courts to assist clients from all parts of the world in asset recovery and insolvency proceedings.

What special strengths do you bring to Sequor?

  • Fernando – During my career, I’ve had the opportunity to handle numerous types of bankruptcy and insolvency matters from a number of different perspectives. In addition to working for plaintiffs and defendants in various fraudulent transfer and avoidance cases, I’ve also assisted a broad range of clients acting in various capacities in bankruptcy and other litigation proceedings, including debtors, trustees, secured creditors, bondholders, judgment creditors, and shareholders. I think the broad range of my prior engagements provides the benefit of multiple perspectives on how to handle new challenges.
  • Leyza – We bring additional depth of experience in both cross-border and domestic insolvency and creditors’ rights matters as well as the ability to counsel clients in Spanish, as we are native Spanish speakers.

How do you give back to the community?

  • Fernando – My wife and I contribute to several charities that are primarily focused on assisting children in developing countries.
  • Leyza – For many years, I have taught law students in clinical programs with the goal of serving the profession of law and the community. Most recently, I have assisted with a medical/legal partnership clinic assisting students with indigent clients who seek pro bono assistance in insolvency matters. I am also committed to increasing diversity and inclusion in the legal profession and to this end have served in various leadership roles, including Treasurer of the Florida Bar’s Business Law Section and Finance Director of IWIRC (International Women’s Insolvency & Restructuring Confederation.) When I served as President of the Bankruptcy Bar Association of the Southern District of Florida, I brought the Credit Abuse Resistance Education Program (C.A.R.E.) to South Florida, and then throughout the state. The C.A.R.E. Program teaches students of all ages the dangers of credit abuse. Through this program, we have presented to students in middle schools through to university freshmen. I am still involved in this program and most recently presented to students at the Department of Juvenile Justice in collaboration with the Legal Up Program. Teaching at-risk students and foster youth in transition about the dangers of credit abuse has been a good way to merge my skill set and experience as a bankruptcy lawyer with my love of teaching.

What is something people don’t know about you? (could be a hobby, interesting experience, skill or talent)

  • Fernando – Last year, I decided to take on the challenge of building a large wooden deck in my backyard. Not being a carpenter, and working only on weekends, the project turned out to be somewhat ambitious, and took far, far, . . . far longer than anticipated. Although it was a very rewarding experience, I’m fairly certain that my wife will insist that all future carpentry be left to the professionals.
  • Leyza – Many people do not know that law is my second career, having worked as a public school teacher prior to and during my law school years. Since then, I have also served as an adjunct professor teaching law students.

Sequor Law Picks Up Two Bankruptcy Attorneys From GrayRobinson

By Rick Archer

Leyza Blanco and Fernando Menendez Jr.

Sequor Law has added two former GrayRobinson PA shareholders, including one of the founding members of that firm’s Miami office, to its own Miami-based bankruptcy practice, the firm has announced.

In a statement released June 4, Sequor Law said new partners Leyza Blanco and Fernando Menendez Jr. have experience dealing with complex and cross-border bankruptcy cases, which would be a particular asset to the firm.

“The firm not only gains two outstanding lawyers with years of experience in insolvency, restructuring and commercial litigation but their bilingual and multicultural heritage will add to the growth of our market leadership in international asset recovery and cross-border insolvency,” Sequor Law founding shareholder Ed Davis said in the statement.

Seven years ago Blanco, a graduate of the University of Miami School of Law, was one of the founding shareholders of GrayRobinson’s Miami office.

The statement said Blanco has a wide range of litigation experience with a special emphasis on complex business bankruptcy and commercial litigation matters. She has extensive international bankruptcy experience, including with the Chapter 15 proceedings for Barbados-based British American Insurance Co., where she served as U.S. counsel for the court-appointed representatives from 11 different jurisdictions

She is also a Florida Supreme Court Certified Civil Mediator. Menendez, a New York University School of Law graduate, also spent seven years with GrayRobinson after starting his career at White & Case LLP.

Menendez has worked a broad range of business reorganization and restructuring matters as well as complex and contested bankruptcy issues, the statement said. According to his biography on the firm’s website, one major case Menendez has handled was representing the holders of more than $30 million in secured debt in the contested Chapter 11 of the owner of a large Miami real estate parcel.

Both attorneys credited what they called Sequor’s focus on international business as their reasons for joining the firm.

“I think we were both concerned about widening the breadth of our international practice,” Menendez said in a phone interview Monday. “They’re already in these markets. I think we have the opportunity to expand our relationships overseas.”

In the statement, Blanco said they had both worked with a number of Sequor’s attorneys for years and had “long admired” the firm.

“They have significant depth in the cross-border area,” Blanco said in the phone interview. “They have a really deep bench.”

Miami-based Sequor represents financial institutions, governments, and public and non-public companies in commercial litigation, financial fraud cases and bankruptcies in the U.S. and internationally, according to the statement.

To view full article, click here.

Miami’s Sequor Law Raids GrayRobinson for Two Insolvency/Litigation Partners

By Brenda Sapino Jeffreys

Leyza Blanco and Fernando Menendez Jr. joined Miami’s Sequor Law as partners.

Leyza Blanco and Fernando Menendez Jr.

Sequor Law, the Miami firm formed in 2017 as the successor to Astigarraga Davis, on Monday hired insolvency and litigation lawyers Leyza Blanco and Fernando Menendez Jr. as partners. Both came from GrayRobinson.

Blanco said Sequor Law’s well-known international insolvency practice is a great fit for her practice. She does a range of insolvency work and litigation, including complex business bankruptcy and commercial litigation. Menendez does a variety of insolvency work, including complex workouts, bankruptcy litigation and representation of foreign and domestic court-appointed trustees.

Blanco, who is also a Florida Supreme Court-certified civil mediator, declined to identify clients they brought with them to the new firm.

“The firm not only gains two outstanding lawyers with years of experience in insolvency, restructuring and commercial litigation, but their bilingual and multicultural heritage will add to the growth of our market leadership in international asset recovery and cross-border insolvency,” Edward Davis, a founding partner of Sequor Law, said in a statement.

Both Blanco and Menendez are fluent in English and Spanish.

In April 2017, Astigarraga Davis co-founder Jose Astigarraga left the firm along with a group of international arbitrators to open a Miami office for Reed Smith. At that time, Davis changed the name of Astigarraga Davis to Sequor Law, which has a practice focusing on asset recovery, financial fraud and cross-border insolvency.

With the lateral hires, Sequor Law now has 14 lawyers.

GrayRobinson, the duo’s former firm, did not immediately respond to a request for comment.

To view full article, click here.

How to Answer Tough Law School Interview Questions

By Ilana Kowarski

In law school interviews, it’s important to explain why you’re a strong candidate, experts say.

Trial lawyers and appellate lawyers are often asked questions by judges who expect an immediate response. These attorneys cannot waver over what to say; they must improvise and come up with a compelling argument.

Some of the most influential attorneys in U.S. history are famous for their ability to deliver captivating, off-the-cuff speeches. Before he joined the U.S. Supreme Court, Justice Thurgood Marshall was a litigator known for his powerful speeches during civil rights cases. And Clarence Darrow – a trial attorney who represented clients in some of the most controversial legal disputes of the early 20th century like the “Scopes monkey trial” – was often lauded for his ability to sway juries with his remarks.

Law school admissions committees strive to identify students who have the potential to have a lasting positive impact on the legal profession. That’s one reason why they look for applicants who have the capacity to speak with authority and conviction in a way that inspires others. But law schools also have a more pragmatic reason to recruit students with a silver tongue: Oral advocacy is a crucial part of many legal jobs.

Attorney Andrew Ittleman, a founder and partner with the Fuerst Ittleman David & Joseph law firm in Miami, says that showing poise during a law school admissions interview is a must.

“[In] exercises like that, you know, whether it’s sitting in an interview or arguing in court, you want to get to a place where you can be loose going in,” Ittleman says. “It’s not a test… Nobody is grading you the way that they would on a test. They want to see who you are as a person.”

Ittleman advises law school applicants to conduct a few practice interviews with people they trust who can provide honest feedback. “Go through a couple of dry runs,” he suggests. Ittleman says practice interviews help students discover the right words to use to clearly express their thoughts.

With that in mind, attorneys say that law school applicants should figure out how they’d like to answer the following questions before their admissions interviews.

1. Why do you want to become a lawyer? Experts say this is a question that J.D. applicants must have a compelling answer for, because law schools are wary of admitting students who view law school as a delay tactic to avoid making a career choice.

“I believe strongly that we should prepare and produce graduates who passionately want to be lawyers, because I believe lawyers who are passionate about what they are doing will be happy lawyers,” says Kathleen Boozang, dean of the Seton Hall University School of Law in New Jersey. “And so I am looking to see that the student is going to law school because they are inspired to go to law school, as opposed to [because] they really can’t think of anything else to do.”

2. Why are you applying to this particular law school? “Students should go into interviews knowing everything on that school’s website, its values, how it describes itself, who the star professors are, etc.,” says Ella Tyler, a retired lawyer who works as a tutor for Varsity Tutors, a virtual education platform. “Law requires preparation and research, so if you showcase those skill sets in your interview, it’s proof that you have what it takes to be a lawyer.”

3. What kind of law are you most interested in practicing? What is your dream law job? If you want to use a law degree in an unconventional way, such as in a policy job or a nonlegal business position, you may be asked: Why do you need a law degree? What would a law degree allow you to do professionally that you couldn’t do without the degree?

Experts say law schools are looking for applicants who can clearly articulate how they intend to use a J.D., because these schools don’t want to admit students who lack a clear justification for investing the time, effort and expense that law school requires.

“Law school is hard, it’s a lot of work, and you have to have the spark,” Boozang says. “You have to have a passion, you need to want to do it, and I want to just confirm that the student knows what they are getting into and that the desire is real.”

4. What book are you reading at the moment, and what do you think of it? If you aren’t currently reading a book, you may be asked an alternative question: Who is your favorite author and why?

Boozang says she asks questions like this to see whether a J.D. applicant is intellectually curious, enjoys the written word and can formulate a coherent argument about what he or she has read. The ability to analyze a text is a key skill for an aspiring lawyer, Boozang says.

Questions of this type are also meant to reveal whether an applicant has a well-rounded personality that includes interests besides academics, Boozang says. She advises applicants to read the news and continue pursuing their extracurricular interests during the law school admissions process, because it gives them something interesting to discuss when they are asked personal questions.

“I emphasize the importance to young people thinking about law school the need to be thinking about the world around them,” she says.

5. What college paper are you most proud of? The thinking behind this question is that it allows a J.D. applicant to discuss a subject they are enthusiastic and knowledgeable about, Boozang says. This interview question illuminates the way an applicant thinks and clarifies whether they have the mindset of a future attorney, she adds.

Boozang says a J.D. applicant who is asked this question should be prepared to answer follow-up queries about his or her paper, which may ultimately lead to a back-and-forth discussion with the interviewer. She says that the topic or thesis of the paper will be less relevant to the interviewer than whether the applicant is able to clearly explain his or her ideas and make a coherent argument.

6. How would you contribute to a law school class? Experts say questions like this give law school applicants an opportunity to differentiate themselves from their competitors in the J.D. admissions process.

Nyana Abreu, an attorney at Sequor Law in Miami, says the key to answering this question well is to talk less about academic statistics and more about who you are as a person.

“That’s not an academic question, and I think that’s something that a lot of candidates miss – that when you’re given an opportunity to talk about yourself, they don’t want to know your GPA [and] they don’t want to know your test scores,” she says. “They already know all those types of things. They want to know something memorable about you. So I would say, think of that question as more of a first date question. You’re not so much telling the interviewer why you’re so studious and hardworking. You’re telling the interviewer why people want to spend time with you.”

To view full article, click here.

April 2018 Quarterly Newsletter

Recoup From A Ponzi Past?

Law: After bankruptcy, lawsuit, Woodbridge tries a turnaround.

By Helen Floersh

Woodbridge Group of Cos. in December made headlines from Southern California to South Florida after it filed for Chapter 11 protection and was subsequently sued by the Securities and Exchange Commission for allegedly running a billion-dollar Ponzi scheme.

Woodbridge founder Robert H. Shapiro is alleged to have squandered investor money, paying big returns to old investors using fresh money from new investors, in classic Ponzi-scheme fashion. He enjoyed a lavish life, too, the SEC claimed, blowing millions on limousine service, fine wine and big parties attended by such prominent Republicans as Karl Rove.

Law: New Board Plans to Restructure Woodbridge

But what’s happened since is unusual. Ponzi schemes usually collapse upon being exposed. But management at the real estate investment firm – situated in a two-story office building on Ventura Boulevard in Sherman Oaks – appear set to overhaul its operations and try to make good with its creditors. The company announced early last month that it had cut all ties with Shapiro (not to be confused with renowned Los Angeles attorney Robert L. Shapiro, cofounder of LegalZoom.com Inc. in Glendale).

As part of a deal reached with federal regulators Jan. 24 in U.S. Bankruptcy Court in Wilmington, Del., the company has appointed a new board of directors to hunt for a chief executive who will spearhead a strategy to recoup the $1.2 billion Woodbridge raised from more than 8,400 investors. Meanwhile, the SEC has called off its request for a receiver.

“This board will guide Woodbridge through a fair and transparent restructuring process focused on maximizing recoveries for investors,” Woodbridge said in an e-mail to the Business Journal. “After conducting a comprehensive review of assets and operations, this board will begin developing a plan of reorganization, which will determine how creditor recoveries are managed and what Woodbridge might look like after the restructuring process is completed.”

Former management

Woodbridge investors in the past were told that the company was putting their money into high-interest loans made to luxury real estate developers. The borrowers were actually shell companies owned and operated by Shapiro, the SEC alleged in its Dec. 22 complaint.

“Shapiro promised investors they would be repaid from the high rates of interest (earned) on loans the companies were purportedly making to third-party borrowers,” the SEC wrote.

He allegedly used teams of internal and external sales agents to sell the securities to investors, at least 2,600 of whom were South Florida-based retirees who invested in Woodbridge using money from their Individual Retirement Accounts, the SEC alleged. They were guaranteed monthly interest and dividends from the so-called “hard money” loans Woodbridge was making.

Woodbridge claimed it generated between 11 and 15 percent annual interest for short-term financing, 5 to 10 percent of which was returned to investors, according to the SEC. In addition, investors were told they would see gains from the sale of real estate properties purchased and developed by the company, the SEC said. In reality, only about $14 million in interest was paid to Woodbridge by third-party borrowers, the SEC claimed. Roughly $103 million of new investors’ money was used to pay monthly interest and dividends to existing investors, with another $265 million paid as principal. At the time of the lawsuit, $961 million in principal remained due, the SEC said.

“The claimed interest payments from the purported third-party ‘property owners’ … did not exist,” the lawsuit stated. “Payments …derived almost exclusively from funds Woodbridge received from other investors.”

However, some purchases were, in fact, made. The real estate to which the Woodbridge loans referred included nearly 200 properties, most of them in Aspen, Colo. and Los Angeles, none of which investors had any say in choosing. The L.A. purchases were conducted through the company’s subsidiary Mercer Vine and included the historic Owlwood estate in Holmby Hills, which once belonged to Sonny Bono and Cher, as well as several other luxury properties, news reports said. Others were vacant lots “that have sat undeveloped for years,” the SEC claimed.

Meanwhile, Shapiro spent upwards of $21 million in investors’ money on himself and his family, the SEC said, including $34,000 on limousine services and $600,000 on political contributions. A local newspaper in Aspen detailed the events he threw with prominent Republican politicians, including former White House Advisor and Deputy Chief of Staff Rove along with current Energy Secretary Rick Perry. Other expenses included $1.4 million on luxury retail items and $1.2 million in alimony, SEC documents said. “Shapiro treated himself to an exorbitant lifestyle, at the investors’ expense,” the SEC said.

Restructuring

Shapiro resigned from Woodbridge Dec. 1, according to company documents. Through a transition services agreement between an LLC Shapiro established in September and Woodbridge, he named himself as a “consultant” to the firm at a monthly fee of $175,000. The agreement was terminated by the start of the year; Woodbridge said in a Jan. 2 press release that it had removed him from all matters involving the company.

Woodbridge had appointed Lawrence Perkins of L.A. management consultancy Sierra-Constellation Partners to steer the company through bankruptcy as its chief restructuring officer, but on Jan. 19 announced that he had resigned as Woodbridge seeks out a new chief executive with “homebuilding experience.”

As part of the agreement reached Jan. 23 in bankruptcy court, the company has appointed a trio of directors – Richard Nevins, M. Freddie Reiss and Michael Goldberg to oversee the search. Nevins is an attorney from Riverside, while Reiss most recently served as senior managing director in the corporate finance division of business advisory firm FTI consulting’s L.A. offices. Goldberg is the co-chair of the fraud and recovery practice group at the Fort Lauderdale, Fla. offices of Akerman, a Nevada-based law firm.

Reorganization: Investors Wait for SEC Inquiry

The company also has formed committees to represent investors’ interests, according to a release from the SEC. In turn, the SEC has withdrawn its request for a court-ordered trustee and a receivership for Woodbridge’s assets.

Investors will have to wait until bankruptcy proceedings are further along to know whether they will be able to recover much of their money. The company’s ability to emerge from the scandal unscathed will depend on both on their willingness to remain patient while the company restructures itself as well as what the SEC finds during its ongoing investigation, explained Arnie Lacayo, a Miami attorney at the firm Sequor Law and who is unconnected to Woodbridge but who reviewed the case at the Business Journal’s request. He noted the fact that the company declared bankruptcy voluntarily before being sued by the SEC may complicate the matter.

“(These kinds of cases) don’t normally involve bankruptcy where the business can be reorganized, though it does happen,” Lacayo said. “You have these very powerful forces that are clashing (the SEC and the federal bankrupt- cy court) as to what should happen next.” An attorney for Shapiro could not be reached, though his legal representative previously told the Wall Street Journal that Shapiro “denies any allegation of wrongdoing and looks forward to defending himself in a court of law.” The SEC declined to comment apart from its remarks in public materials.

For now, it remains to be seen whether Woodbridge will have to sell off its assets or be able to continue operations. Lacayo said the SEC could move to shut down the enterprise if it is proven that it was primarily run as a Ponzi scheme.

“(Woodbridge) will need to show that investments were made over time and that there was independence by the people charged with running the company.” he explained. “Investigators will get at those facts pretty quickly.”

To view full article, click here.

SDFL Adopts Guidelines For Cooperation On Int’l Bankruptcies

By Carolina Bolado

The Southern District of Florida’s bankruptcy court has adopted guidelines for communication and cooperation between courts in cross-border insolvency matters that practitioners say will help courts efficiently handle the increasing number of Chapter 15 cases filed in the region as its ties to Latin America continue to strengthen.

In an order issued Feb. 1, Chief Judge Laurel Myerson Isicoff said the court would adopt the Judicial Insolvency Network’s guidelines for cooperation on Chapter 15 bankruptcies, making the district the third, after Delaware and the Southern District of New York, to implement the toolkit for cross-border cooperation.

“Together with the District of Delaware and the Southern District of New York, we have the vast majority of the Chapter 15 cases filed in the country, so it makes sense that at least in our jurisdictions that we would adopt these guidelines,” Judge Isicoff said.

The guidelines, created by JIN in late 2016, are meant to improve communication and cooperation between courts handling parallel bankruptcy proceedings. Courts that adopt the guidelines agree to accept orders made in proceedings in other jurisdictions, barring an objection by one of the parties. The guidelines also provide frameworks for holding joint hearings and for judge-to-judge communication.

Greg Grossman of Sequor Law, which files a large percentage of the Chapter 15 cases in the Southern District of Florida, called the guidelines a “really large toolkit.”

“In some cases, you’re going to need a wrench; some will need a Phillips-head screwdriver, and some will need a hammer,” he said. “This is an opportunity to encourage more direct communication with each other.”

Under the guidelines, bankruptcy courts should encourage administrators of estates in parallel proceedings to work together. A bankruptcy judge should also share all orders, judgments, opinions, transcripts of proceedings and other court documents with his or her counterpart in a different jurisdiction, according to the guidelines.

The guidelines also lay out procedures for communications between courts by requiring notice of any judge-to-judge communication and allowing the parties to be present. In addition, they allow courts to authorize a party in a foreign proceeding to appear and be heard on a specific matter without making the party subject to that court’s jurisdiction for any other purpose.

After the guidelines were drafted, Singapore and the District of Delaware were the first jurisdictions to adopt them in early February 2017. The Southern District of Florida followed shortly thereafter, as did Bermuda, England, Wales and the British Virgin Islands. New South Wales in Australia agreed to the guidelines in September.

So far, the Southern District of Florida averages about two Chapter 15 cases per month, but it’s a number that is growing as Miami in particular deepens its ties with Latin America, according to Grossman.

This move by the Southern District of Florida’s bankruptcy court could encourage courts in Latin America to get on board, he said.

“Nobody in Latin America has passed it, but it’s coming,” he said. “It took them awhile to get Chapter 15, so baby steps.”

Already they appear to be moving in that direction. Two bankruptcy judges in Latin America, one in Sao Paulo, Brazil, and another in Buenos Aires, Argentina, joined JIN, though Grossman said it is not clear whether they have adopted the guidelines for cooperation. But the action by the judges marked JIN’s first foray into Latin America.

“Our best guess — but we are by no means certain — is that these individual judges would follow the guidelines in their own cases, but they are not able to have their courts adopt the guidelines,” Grossman said.

Judge Isicoff said that these communication and coordination issues have not come up in any Chapter 15 cases she has overseen, and her fellow judges on the bench reported no problems so far when they sat down to discuss whether to adopt the guidelines. But she said that didn’t mean it didn’t make sense for the court to get on board.

“Just because something hasn’t come up yet doesn’t mean it won’t come up, especially as more and more Chapter 15 cases get filed,” Judge Isicoff said. “We just felt it makes sense for us to be consistent with the Southern District of New York and the District of Delaware.”

To view full article, click here.

Sequor Attorneys chosen in Latinvex Latin America’s Top 100 Lawyers

Latinvex recognizes the top foreign lawyers in Latin America

Edward H. Davis, Jr. was named among Latin America’s Top 100 Lawyers of 2018 by Latinvex. Those honored were evaluated on criteria such as recent track record on major deals and business, prominence of firm in Latin America, and rankings by third parties such as Chambers and Partners, Legal 500 and Thomson Reuters.

Davis received the distinction for his stellar work and extensive experience in the litigation and fraud areas.

Edward H Davis Jr.