Prior to 1997, appellee Yuval Ran ("Ran") was a prominent Israeli businessman and the CEO of Israel Credit Lines Supplementary Financial Services Ltd. ("Credit Lines"). See In re Ran, 390 B.R. 257, 260 n. 1 (Bankr. S.D. Tex. 2008). Credit Lines encountered financial difficulties and ultimately began liquidating its interests in 1995.

Even though the EU Convention was never adopted, the Guide to Enactment's references to the EU Convention's text are still relevant and valid, inasmuch as the Guide to Enactment was drafted during a time when it was possible to think that the EU Convention would be adopted, and the final text of the EU Regulation is based upon and closely parallels the earlier text of the EU Convention. These close connections are discussed in In re Ran, 390 B.R. 257, 264 n. 3 (Bankr.S.D.Tex.2008) (quoting the opinion of Mr. Advocate General Ruiz-Jarabo Colomer in Case C-1/04, Proceedings brought by Staubitz-Schreiber, [2006] E.C.R. I-701, 2005 WL 2138235 (ECJ Grand Chamber)). Insolvency proceedings do not necessarily involve the intervention of a judicial authority; the expression "court" in this Regulation should be given a broad meaning and include a person or body empowered by national law to open insolvency proceedings.

That the controlling instrument is a regulation rather than a law arises because the European Union was unable to agree, for nonbankruptcy reasons, on an earlier draft law, known as the European Union Convention on Insolvency Proceedings (the "EU Convention"). For a brief overview of the history and the current text of the EU Regulation, see Ian F. Fletcher, The European Union Regulation on Insolvency Proceedings, reprinted in INSOL INTERNATIONAL, CROSS-BORDER INSOLVENCY: A GUIDE TO RECOGNITION AND ENFORCEMENT, 15-45 (2003). Even though the EU Convention was never adopted, the Guide to Enactment's references to the EU Convention's text are still relevant and valid, inasmuch as the Guide to Enactment was drafted during a time when it was possible to think that the EU Convention would be adopted, and the final text of the EU Regulation is based upon and closely parallels the earlier text of the EU Convention. These close connections are discussed in In re Ran, 390 B.R. 257, 264 n. 3 (Bankr. S.D. Tex. 2008) (quoting the opinion of Mr. Advocate General Ruiz-Jarabo Colomer in Case C-1/04, Proceedings brought by Staubitz-Schreiber, [2006] E.C.R. I-701, 2005 WL 2138235 (ECJ Grand Chamber)). Insolvency proceedings do not necessarily involve the intervention of a judicial authority; the expression "court" in this Regulation should be given a broad meaning and include a person or body empowered by national law to open insolvency proceedings.

Recognition of a proceeding requires the application of "objective criteria," and it is only post-recognition relief which "turns on subjective factors that embody principles of comity." In re Atlas Shipping , 404 B.R. at 738 (quoting In re Bear Stearns , 389 B.R. at 333 (citing 11 U.S.C. §§ 1507, 1517, 1521, 1525 ; Model Law Art. 7, 17, 21, 25)); see alsoIn re Ran , 390 B.R. 257, 292 (Bankr. S.D. Tex. 2008) ("By arguing comity without satisfying the conditions for recognition, [the foreign trustee] urges this Court to ignore the statutory requirements of 11 U.S.C. § 1517.... comity is not an element of recognition; it is rather, a consideration once recognition is granted."). The objective criteria of the recognition procedure "reflects a policy determination by UNCITRAL and Congress that this Court should not assist a representative of a foreign action unless the debtor has a sufficient presence in the country in which the foreign action is taking place."

The same is true in this case too. In In re Ran , 390 B.R. 257 (Bankr. S.D. Tex. 2008), the bankruptcy court denied recognition of an Israeli bankruptcy proceeding as either a foreign main or nonmain proceeding. On remand from the district court, the bankruptcy court "decline[d] to make findings on whether or not Lavie [a trustee overseeing the bankruptcy] acted in bad faith.

In In re Ran, 390 B.R. 257 (Bankr.S.D.Tex. 2008), the bankruptcy court denied recognition of an Israeli bankruptcy proceeding as either a foreign main or nonmain proceeding. On remand from the district court, the bankruptcy court "decline[d] to make findings on whether or not Lavie [a trustee overseeing the bankruptcy] acted in bad faith."

In re Atlas Shipping , 404 B.R. [726] at 738 [ (Bankr. S.D.N.Y. 2009) ] (quotingIn re Bear Stearns, 389 B.R. at 333 (citing 11 U.S.C. §§ 1507, 1517, 1521, 1525 ; Model Law Art. 7, 17, 21, 25)); see alsoIn re Ran , 390 B.R. 257, 292 (Bankr. S.D. Tex. 2008) ("By arguing comity without satisfying the conditions for recognition, [the foreign trustee] urges this Court to ignore the statutory requirements of 11 U.S.C. § 1517... comity is not an element of recognition; it is rather, a consideration once recognition is granted.").

In Ran , the Fifth Circuit affirmed a decision of the United States District Court for the Southern District of Texas, which court had affirmed a decision of the United States Bankruptcy Court for the Southern District of Texas. In re Ran , 390 B.R. 257 (Bankr. S.D. Tex. 2008), aff'd sub nom. , Lavie v. Ran , 406 B.R. 277 (S.D. Tex. 2009), aff'd , 607 F.3d 1017 (5th Cir. 2010).In analyzing Mr. Ran's COMI, the Fifth Circuit weighed the facts placed into evidence by the Israeli receiver in support of the contention that Israel was Mr. Ran's COMI (i.e. , that Mr. Ran's creditors were located in Israel and that his principal assets were being administered in the Israeli bankruptcy proceeding, which was initiated in Israel under Israeli law) against the following facts: (i) Mr. Ran and his family left Israel nearly a decade prior to the filing of the chapter 15 petition; (ii) Mr. Ran had no intention of returning to Israel; and (iii) Mr. Ran was a permanent legal resident of the United States and his children were U.S. citizens.

See, e.g., Morning Mist Holding Ltd. v. Krys (In re Fairfield Sentry, Ltd.), 714 F.3d 127, 132 (2d Cir.2013); In re Ran, 390 B.R. 257 (Bankr.S.D.Tex.2008). To deny recognition might be to deny the Foreign Representatives of their common law rights as trustees to bring an action in order to assert claims on behalf of beneficiaries.

FN19. Betcorp in turn relied on a lower court decision in Ran. 400 B.R. at 290–91, citing In re Ran, 390 B.R. 257, 264 n. 3 (Bankr.S.D.Tex.2008). These deceptively simple terms have engendered considerable litigation.