In a recent jury trial, the United States District Court for the District of Connecticut faced a choice-of-law issue in a cross-border bankruptcy avoidance and recovery action. The court ultimately decided that Irish law applied to the fraudulent conveyance claims occurring in several countries including Ireland, Switzerland, England, South Africa, and the United States.
The court reached this decision by focusing on the debtor’s significant relationship between the content of the case and the Republic of Ireland. Content of the case included the citizenship of the debtor, the debtor’s business activities, location of the assets fraudulently transferred, and the location of the creditor and their connection to Ireland.
Subsequently, the stage was set for the jury as the trustee’s fraudulent transfer claims were to be litigated under the Code, under state law, and, significantly, under Irish law. The jury returned a verdict in favor of the trustee avoiding multiple transfers as actually fraudulent and awarded more than twenty-one million dollars.
This case is distinguishable from other decisions since the court applied Irish law even though some transfers occurred elsewhere. Traditionally, the choice of law has defaulted to the place of transfer.
More importantly, this case highlights the importance of prelitigation analysis, especially regarding choice-of-law between foreign and domestic jurisdictions in cross-border disputes.
Thomas H. Curran Associates, LLC served as special litigation counsel to the chapter 7 Trustee in this precedential case. Thomas Curran, managing partner, highlights the key takeaways that can be found from this court ruling in his recent article published by American Bankruptcy Institute.
Read the full article below:
Cross-Border Bankruptcy Proceedings Present Crucial Choice of Law Considerations
Reprinted with permission from the Commercial Fraud Committee Newsletter, published by American Bankruptcy Institute. Copyright © 2020. All Rights Reserved.