Opinion
No. 08-0299-bk.
November 21, 2008.
Appeal from the United States District Court for the Southern District of New York (Laura Taylor Swain, Judge).
UPON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the final order of the District Court is AFFIRMED.
FOR PLAINTIFF-APPELLANT: Mark R. Owens, Barnes Thornburg LLP, Indianapolis, IN.
FOR DEFENDANT-APPELLEE: Jack A. Greenbaum, Blank Rome LLP, New York, NY.
PRESENT: JOSÉ A. CABRANES, CHESTER J. STRAUB, ROBERTD. SACK, Circuit Judges.
Plaintiff Nugent Establishment Industrie F.L. ("Nugent") appeals from a final order of the District Court entered on December 18, 2007, affirming the December 29, 2006, final order of the Bankruptcy Court for the Southern District of New York (Allan L. Gropper, Judge), granting defendant's motion for summary judgment on its petition under former Section 304 of the Bankruptcy Code. We assume the parties' familiarity with the factual and procedural history of the case, though we revisit key portions of that history here.
Because the petition in this case was filed before October 17, 2005, Section 304 of the Bankruptcy Code applies instead of Chapter 15, which was enacted pursuant to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Section 304(c) provides that:
(c) In determining whether to grant relief under subsection (b) of this section, the court shall be guided by what will best assure an economical and expeditious administration of such estate, consistent with —
(1) just treatment of all holders of claims against or interests in such estate;
(2) protection of claim holders in the United States against prejudice and inconvenience in the processing of claims in such foreign proceeding;
(3) prevention of preferential or fraudulent dispositions of property of such estate;
(4) distribution of proceeds of such estate substantially in accordance with the order prescribed by this title;
(5) comity; and
(6) if appropriate, the provision of an opportunity for a fresh start for the individual that such foreign proceeding concerns.
11 U.S.C. § 304 (c).
In December of 2000, Zoran Milovanovic was appointed by the Commercial Court of Belgrade as liquidator for Jugoslovenska Izvozna i Kreditna Banka, a/k/a JIK Banka, a/k/a Yugoslav Export Credit Bank ("JIK Banka") — a bank organized in the former Federal Republic of Yugoslavia that was placed into liquidation proceedings on July 26, 2000, pursuant to Yugoslav insolvency law. Acting in his capacity as liquidator, Milovanovic filed a petition in the Bankruptcy Court under Section 304 on April 17, 2003, seeking recognition of the foreign insolvency proceeding, as well as an injunction (1) to restrain the disposition of approximately $848,000 in the United States garnished by Nugent and assertedly belonging to JIK Banka and (2) to have such funds and any other property of JIK Banka in the United States turned over to JIK Banka to be transferred to what was then the State Union of Serbia and Montenegro for administration in the foreign insolvency proceedings.
On June 6, 2003, Nugent filed an answer to Milovanovic's Section 304 petition. Nugent is a Liechtenstein corporation that had obtained a default judgment against JIK Banka in the New York Supreme Court for approximately $2.5 million plus interest in 1998. In February 2003, after a freeze of Yugoslav assets had been lifted by the President of the United States, Nugent executed on the default judgment and the New York City Sheriff garnished JIK Banka funds on deposit in New York. Nugent opposed the petition on the ground that Milovanovic was not a valid "foreign representative" as defined by the Bankruptcy Code, and that Serbian law was not entitled to recognition under Section 304.
After Milovanovic's Section 304 petition and Nugent's opposition had been filed, Milovanovic was succeeded as liquidator of JIK Banka by another individual. On April 7, 2005, the liquidation proceeding in Serbia was converted to a bankruptcy proceeding, pursuant to Serbian law, and Milovanovic's successor was replaced by two different Serbian government agencies. The second agency, the Agency for Deposit Insurance of Serbia, is the current Section 304 petitioner.
In March 2006, the petitioner filed a motion for summary judgment in the Bankruptcy Court, seeking the relief discussed above under Section 304, which that Court granted in its November 30, 2006 Memorandum and Decision-Order, see In re Milovanovic, 357 B.R. 250 (Bankr. S.D.N.Y. 2006), made final by an order entered on December 29, 2006. The Bankruptcy Court, pursuant to its authority under Section 304(b), ordered the funds held in the United States to be released to petitioner for transmittal to JIK Banka's Serbian estate for distribution as directed by Serbian law.
Nugent then appealed the Bankruptcy Court's decision to the United States District Court for the Southern District of New York. Specifically, Nugent argued that the Bankruptcy Court: (1) erred as a matter of law in holding that the petitioner had standing as a "foreign representative" to prosecute the Section 304 petition; and (2) abused its discretion in its analysis of the statutory factors set forth in Section 304(c). The District Court affirmed the Bankruptcy Court decision in an opinion and order entered December 18, 2007. See In re Zoran Milovanovic, No. 07-cv-02267-LTS, dkt. No. 16 (S.D.N.Y. December 18, 2007). Nugent renews its two arguments on appeal.
"An appeal from a district court's review of a bankruptcy court ruling is subject to plenary review." In re Halstead Energy Corp., 367 F.3d 110, 113 (2d Cir. 2004). In a bankruptcy appeal, "we review the bankruptcy court decision independently, accepting its factual findings unless clearly erroneous but reviewing its conclusions of law de novo." Ball v. A.O. Smith Corp., 451 F.3d 66, 69 (2d Cir. 2006) (internal citation and quotation marks omitted).
Beginning with Nugent's first issue on appeal — that petitioner is not a proper "foreign representative" — we agree with the Bankruptcy Court's conclusion that the petitioner is, indeed, a proper foreign representative for the purposes of filing a Section 304 petition, substantially for the reasons given by the District Court and the Bankruptcy Court. See In re Zoran Milovanovic, No. 07-cv-02267-LTS, dkt. No. 16 (S.D.N.Y. December 18, 2007); In re Milovanovic, 357 B.R. at 253.
Turning next to Nugent's second issue on appeal — that the Bankruptcy Court erred in its analysis of the Section 304(c) factors — we note that this Court reviews a bankruptcy court's analysis of the Section 304(c) factors for abuse of discretion. In re Treco, 240 F.3d 148, 155 (2d Cir. 2001). However, with respect to the grant of summary judgment, "we review de novo whether, viewing the record in the light most favorable to the non-movant, here [Nugent], any genuine and disputed issue of material fact underlies the bankruptcy court's decision." Id. Again, substantially for the reasons stated by the Bankruptcy Court and the District Court, we conclude that the Section 304 factors favor granting petitioner's request for relief. See In re Zoran Milovanovic, No. 07-cv-02267-LTS, dkt. No. 16 (S.D.N.Y. December 18, 2007); In re Milovanovic, 357 B.R. at 254-56. We therefore reject Nugent's contention that the Bankruptcy Court erred in awarding petitioner the relief it sought.
CONCLUSION
We have considered all of Nugent's contentions and find them to be without merit. The final order of the District Court is AFFIRMED.